In this Insight, CRU takes a step back to review the key changes and developments in the wire and cable industry in 2021, highlighting the highs and lows. Subsequently, we form our ‘Top 10 Calls for 2022’ which we believe will steer the market over this coming year. We will closely track the development of these themes throughout 2022.
Global market surpassed pre-Covid consumption levels
2021 has been a year dominated by the story of recovery from the most severe impacts of the Covid-19 pandemic. The economic rebound has been geographically uneven as national policy, sector exposure and stimulus measures dictated, to a large extent, how well countries weathered the storm. The global wire and cable industry has reflected these trends.
With easing supply constraints and recovering demand applications, the wire and cable industry has demonstrated its resilience. Global cable demand continued to recover throughout last year, with overall wire and cable demand recording growth of 5.5%. This recovery is forecast to continue throughout 2022 with demand growth expected in the region of 4% despite inflationary headwinds and rising interest rates.
Review of selected calls from 2021: Forecast versus reality
- Vaccine rollouts will allow for a market rebound: As of February 2022, over 10 billion Covid-19 vaccinations have been administered globally. Undoubtedly, this greatly helped the wire and cable value chain move back to a sense of normality. Total global insulated metallic wire and cable consumption had surpassed 2019 levels by the end of 2021.
- Automotive production will gradually improve: Vehicle production only increased moderately last year, with absolute levels still well below 2019 levels. This is mainly due to supply bottlenecks such as the semiconductor shortage. However, sales of the more cable intensive EV’s almost doubled from 2020, resulting in robust winding wire demand.
- Chinese infrastructure projects will improve LVE cable demand: The Chinese real estate market crisis dominated the headlines in the second half of 2021. Despite this, floor completions were up by 11% y/y, thus supporting LVE cable demand. However, CRU is bearish on the country’s mid-term demand, expecting growth to stagnate in 2024.
- Commodity prices will increase on an annual basis: 2021 has been one of the most volatile years on record when it comes to commodity prices. Both copper and aluminum prices surged by around 50% y/y. Tight supply, low inventory levels, energy crisis and a solid demand recovery are among factors that contributed to the price rally.
Explore this topic with CRU