Overhead Aluminium Conductor Market Report

Overhead Aluminium Conductor Market Report

During the forecast period, demand for aluminium wires is expected to increase due to the growing need to upgrade infrastructure for electricity distribution, increased investments in the construction and telecom industries, and increased production of EVs. Depending on the properties required, different aluminium alloy series such as 3003, 5052, and 316 are used in the production.

Increasing electricity consumption in the United States is expected to increase the demand for aluminium wires throughout the forecast period. According to the US Energy Information Administration, retail sales of electricity in the United States are expected to rise by 2.7% in 2021 after falling by 3.9% in 2020. Furthermore, the New York State Public Service Commission approved the New York Energy Solution Project in February 2021, which is a 54.5-mile, 345-kilovolt transmission line estimated to cost USD 530.0 million to build.

Refurbishment and replacement of old grid infrastructure with new transmission lines, as well as increased installation of high-tension lines over long distances, are expected to accelerate product rollout during the forecast period. Furthermore, the widespread concern to replace ageing energy infrastructure with secure, clean, and dependable energy resources is expected to supplement business expansion.

In 2022, the HVAC segment accounted for nearly 84% of total revenue. Rising ampacity and overall performance criteria for electricity transmission networks, encouraged by synchronous reforms and mandates, are expected to boost product adoption. Furthermore, the emphasis on developing energy-efficient electric networks, as well as growing concerns about accumulating electric infrastructure, have fueled product development for HVAC transmission.

Regional rules, work restrictions, and geopolitical constraints are impeding the growth of the overhead conductor market in developing economies. Furthermore, volatile raw material costs, particularly for aluminum, and a reliance on imports are impeding industry dynamics. Furthermore, political unrest has made investors hesitant to invest or divest in certain regions, causing development to be delayed. However, prominent initiatives and favourable policies imposed by governments worldwide to further technological advancements are expected to help manufacturers overcome this constraint.

1.2 Overhead Aluminum Conductor Market: COVID-19 Outbreak

Under lockdown, electricity demand fell dramatically, with dramatic reductions in services and industry only partially offset by increased residential use. When confinement was eased in Italy and Germany in April, electricity demand began to recover. This trend was confirmed in May, when more countries (India, France, Spain, and the United Kingdom) relaxed lockdown measures. With the exception of India, where the recovery was more pronounced, electricity demand in June and July remained 10% and 5% lower, respectively, than the same month in 2019. The sustained recovery in EU countries' electricity demand growth in August brought them close to their 2019 levels, though some restrictions measures continue to limit electricity demand in September.

Electricity demand growth in European countries steadily recovered in October, reaching 2019 levels before new restrictions were announced. Strengthening measures had a negative impact on electricity demand in European countries in November, with decreases similar to those seen in June. However, the end of the year saw a recovery in electricity demand, which is now higher than it was in 2019.

In India, the recovery of electricity demand began in early August, with higher levels than in 2019. In September 2020, weather-corrected electricity demand was 3.4% higher than in September 2019, owing to higher demand in the industrial and commercial sectors, as well as higher demand for irrigation, compared to 2019.

The relaxation of restrictions and a stronger economic environment resulted in electricity demand (weather corrected) being more than 10% higher in October 2020 than in October 2019, in line with pre-Covid-19 trends.

Due to the Diwali festival (which takes place a fortnight later in 2020 than in 2019) and agricultural sector strikes, the upward trend inverted again by mid- to end-November and returned to last year's levels. The upward trend resumed in December, with year-end growth exceeding 8% over the previous year.

Electricity demand in China fell sharply in January and February (-13% compared to February 2019, leap year corrected). Part of the difference was caused by China's February being significantly colder in 2019 than in 2020. Even after weather was taken into account, the decrease in demand in February 2020 compared to February 2019 was still significant: -11%.

As restraint measures were relaxed, electricity demand began to show signs of recovery. From April 2020, China's electricity demand recovered completely and returned to pre-Covid-19 levels. Weather-corrected demand was 6% higher than 2019 levels beginning in August 2020.

Beginning with the introduction of Covid-19 in early 2020, the major supply constraints were caused by three key factors:

• FACTORY CLOSURES
• PORT CLOSURES
• CONTAINER SHIP SHORTAGES

Factory shutdowns across Asia, particularly in China, caused production delays and bottlenecks. If an upstream manufacturer experiences a production delay, the effect cascades downstream to other manufacturers who rely on the same source upstream.

Ports have faced similar challenges, with many having to close or restrict labour to avoid outbreaks. This slowed the flow of goods and created bottlenecks.

The demand for raw materials increased as factories began to come online in stages. There aren't enough large container ships to keep up with the increased demand.

The movement in bauxite prices exemplifies this closely linked cycle even more. Bauxite is one of the most abundant minerals in the earth's crust, accounting for nearly 8% of total mineral abundance. Because of this abundance, minor disruptions in output have little effect on prices. This time, however, there were a slew of geopolitical and extraneous events that exacerbated the situation. It began with a trade dispute between China and Australia in early 2021, with Australia demanding an international investigation into the origins of the Covid-19 pandemic. China has effectively banned the import of many Australian commodities, including coal and bauxite.

Then there was the coup in Guinea, which is a major producer of bauxite, which is processed into alumina and then primary aluminium. Guinea, China's second largest source after Australia, supplies 47 percent of its bauxite imports. The political unrest in Guinea in September of this year caught the aluminium raw materials chain off guard, with alumina prices already surging due to a massive fire at the Jamalco alumina refinery in Jamaica, which rendered it out of circulation.