New urbanization helps the low-end cable market

At the recent Central Economic Work Conference, it was proposed that urbanization is the historical task of China’s modernization and the greatest potential for expanding domestic demand. Therefore, it is necessary to focus on improving the quality of urbanization, take advantage of the situation, seek advantages and avoid disadvantages, and actively guide the healthy development of urbanization. As far as the industry is concerned, the decision of the Central Government will drive the market for low-end wire and cable products, that is, low-end wire and cable will meet market opportunities again.

According to the forecast of experts, in the next 10 years, new urbanization construction will drive investment demand of 40 trillion yuan. This means that in the long-term period, new-type urbanization will be the general program for China's economic development. During this period, in addition to the software engineering in social management, the reverse of the basic hardware construction will effectively stimulate the domestic demand market for a variety of industrial products, including wire and cable.

Since 1998, since China’s large-scale urban-rural power grid reconstruction, in recent years, a new round of urban-rural power grid reform has been carried out in the city with “power fiber-to-the-home” and rural “new rural and new power” as its main purpose. In general, wire and cable companies have been benefiting from the national urban and rural power grid reform policy.

New-type urbanization needs to build a scientific and rational urban pattern. Large, medium and small cities, small towns and urban agglomerations should be scientifically laid out, closely linked with regional economic development and industrial layout, and be compatible with the carrying capacity of resources and the environment. All these have put forward more extensive and detailed requirements for the basic construction of urbanization. This also indicates that a large-scale new round of urbanization across the country will be a huge market.

As far as the wire and cable industry is concerned, people have been calling for vigorous development of high-end products. However, after all, the market capacity and value benefits of high-end products are extremely limited, and the products that support a large number of enterprises are still ordinary low-end products. Even some large wire and cable companies frankly stated that “maintaining the products that the company eats at home is still a low-end common wire and cable that accounts for 80-90% of the total.”

The wire and cable products needed for the new urbanization construction will still be: medium and low voltage underground cables, medium and low voltage overhead cables, small-sized overhead conductors, overhead bundled conductors, control cables, building wires, electrical installation cables, small logarithmic optical cables, and optical fiber composites. Power cables, small logarithmic copper core telephone cables, network cables, CATV cables, and photovoltaic cables for roof-top power generation facilities currently recommended by the country. Especially in the construction of electrical wiring, there will be a new hot climax.

These wire and cable products, for the vast majority of medium and small wire and cable companies, especially those in second-tier cities and third-tier cities and rural areas, are capable of manufacturing products, and have a mature business experience. Of course, due to the differences in the scale and distribution of urbanization, the demand for wire and cable will also be quite different. The Pearl River Delta, Yangtze River Delta, and Bohai Rim will continue to dominate the market. With the implementation of the plans for the “economy circle” and “urban agglomeration” of different scales in the central and western regions, the demand for wire and cable will also increase significantly in those regions.