The wire and cable industry has seen a significant recovery in the last 18 months. A recently released study of the world’s leading 60 wire and cable producers published by Integer Research shows combined wire and cable revenues of $47.4 billion in 2004 and more than $56.4 billion in 2005.
“The industry also reported total revenues of $82 billion in 2004 and $97 billion in 2005. In part the continued expansion in the Chinese cable market has driven growth globally, combined with a recovery in demand from the US cable sector, from the low point in 2002,” says Integer Research Director, Philip Radbourne.
“The 60% increase in copper prices during 2006, which is a five-fold increase from the low of $1,400 per ton in November 2001, has also meant that the wire and cable industry will likely surpass the $120 billion level. This is if prices continue at their present level through H2 2006.”
Integer Research analyst Craig French noted, “As a result, the world’s leading 60 wire and cable producers returned to profitability in 2004 and 2005. Most companies showed both operating and net profits in their 2004 financials. This trend continued into 2005, despite higher raw material prices. Higher global demand for a range of cable products, with significantly higher demand from the U.S. and Chinese cable market, helped improve operating margins.”
“Net profit margins across the industry reached 1.1% in 2004, which although modest, were still better than the previous three years of net losses. However, this is still lower than the industry average of 4.5% in 2000,” French continued.
The global wire and cable industry is still dominated by Western or North East Asian cable makers. The leading global players either have a domestic headquarters in the U.S., Western Europe or North East Asia.
“As yet, no major Chinese producers have emerged to threaten the dominance of these global players, but we would expect one or two leading producers from China to emerge within the next five years,” added Radbourne.
