Wire and Cable Compound Market

Market Overview

The global wire and cable compound market size is predicted to grow at a CAGR of 8.68% from its current value of USD 7,943.8 million in 2021 to USD 16,802.54 million by 2030.

Wire and cable compounds are used to make wires and cables with excellent durability, outstanding chemical and corrosion resistance, high mechanical stability, flexibility, and abrasion resistance. Many wire and cable compounds are designed for specific end uses, such as high and low-voltage power cables, telecommunications, telephone wires, coaxial cable, jacketing, etc. Flame retardant properties are required for several of these wire compositions. 

The wire and cable compound market is categorized into types, end-users, and regions.

Market Dynamics

Drivers: Booming Construction Industry in Asia-Pacific

Due to the growing number of building projects worldwide, the wire and cable compound market is likely to rise rapidly over the forecast period. The fastest-growing end-use industry for wire and cable compounds is construction. Globally, many housing developments, including residential, commercial, industrial, and smart buildings, are rapidly expanding. Smart homes and buildings increase the use of wires and cables, increasing the use of insulating materials like PVC, XLPE, and CPE. The rising number of mobile homes is also a crucial component of the wire and cable compound market growth.

India and China are two of the most important contributors to regional market growth. According to the ICE (Institute of Civil Engineers) publication "Global Construction 2030," the global construction market is expected to rise to USD 15.5 trillion by 2030. India, China, and the United States are the top three players, accounting for 57% worldwide growth. India's building market is predicted to rise at nearly double the rate of China's. By 2025, India will be the world's third-largest construction market.

This increase can be ascribed to India's expanding urban population. By 2030, Delhi's population is predicted to increase by 10.4 million, making it the world's second-largest metropolis. According to Timetric (GlobalData Inc.), Asia-Pacific was the world's largest construction market in 2018, valued at USD 5,125 billion. By 2022, the Asia-Pacific construction industry will increase at a CAGR of 6.3%. This expansion of the region's building business will significantly impact the market for wire and cable compound.

Restraints: Restricted Use of Halogenated Polymers

Halogenated polymers are toxic and non-biodegradable. Increasing environmental concerns and the requirement for protection have led to a more careful evaluation of wiring and cabling systems in terms of fire risk and environmental impact over time. Insulation in wire and cable may be damaged by high heat during power transmission, resulting in the production of highly toxic gases if inhaled.

Furthermore, numerous governments are focused on sustainability and supporting environmentally friendly products, with one of the key concerns with wires and cables being at their disposal. If halogenated polymers are used to insulate wires and cables, they will pollute the soil and influence the ecology. Due to these drawbacks, the government is banning the usage of halogenated polymers, which is likely to stifle the wire and cable compound market growth during the projection period of 2020–2030. 

Opportunities: Growing Demand for Electric Vehicles Creates New Opportunities

The future manufacturing of electric vehicles is vital for the expansion of the wire and cable compound business. Wire harnesses in automobiles are made of wire and cables. Compared to conventional or non-electric vehicles, electric vehicles (EVs) require more wire harnesses. In order to transmit electric current to electric vehicles, these electric cables are placed in the battery and its surroundings. In addition, electric vehicles feature battery management systems and other integrated systems that need additional wiring.

Due to the rising acceptance of environmentally friendly and fuel-efficient vehicles, the rise of electric vehicles (EV) is anticipated to be relatively robust in the coming times. Growing concern about air pollution is one of the primary factors driving the electric vehicle market. This is expected to raise the consumption of wire and cable compounds. According to the International Energy Agency, global sales of electric vehicles surpassed USD 2.1 million in 2019. In 2019, electric cars accounted for 2.6 % of global car sales.

Regional Analysis

The wire and cable compound market share is divided into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa. Asia-Pacific and North America dominate the global wire and cable compound market.

Significant Growth in Asia-Pacific and North America

Asia-Pacific holds the largest share in the global wire and cable compound market and is anticipated to grow at a CAGR of 9.97%, generating a revenue of USD 7,902.34 million by 2030. Due to the rise of the construction, automotive, and electronics industries in the region, it is expected to be the fastest-growing region in the wire and cables compound market. The biggest contributors to the regional market growth are India and China. Between 2016 and 2020, India's vehicle output expanded at a CAGR of 2.36%, according to the India Brand Equity Foundation (IBEF). In 2020, India produced over 26.3 million automobiles.

Further, domestic automotive sales in India increased at a CAGR of 1.29% between 2016 and 2020, with roughly 21.5 million vehicles sold in FY2020. China is the world's largest producer of electric automobiles. According to the International Energy Agency's report on global electric vehicles, the global stock of electric passenger cars surpassed 5 million in 2018, 63% up from 2017. Among these vehicles, about 43% of electric passenger cars were discovered on Chinese highways alone. China leads the electric car market, with Europe and the United States coming in second and third positions in battery electric vehicle stock.

North America holds the second-largest share in the global wire and cable compound market. It is anticipated to grow at a CAGR of 8.11%, generating a revenue of USD 4126.60 million by 2030. In terms of technological advancement, North America has been a forerunner. Due to significant chemical plants, the region is now one of the leading manufacturers and users of wire and cable compounds. Massive automobile manufacturing, rising building activities, and the expansion of the power generating sector are all contributing to the market's growth in North America.

According to the International Monetary Fund World Economic Outlook, North America is ranked first in the world in terms of nominal GDP and second in terms of buying power in 2019. In 2017, its nominal GDP was USD 19.39 trillion, and by 2023, it is predicted to reach USD 24.53 trillion. 

According to the International Trade Administration (ITA) of the United States Department of Commerce, the automobile industry in the United States is one of the world's largest. Light vehicle sales totaled around 17 million units. In 2018, total foreign direct investment in the automotive sector totaled USD 115 billion, with USD 105 billion invested in R&D activities.

The market for wire and cable compounds will increase during the forecast period of 2020–2030. Demand for automobiles, trucks, and buses, among other modes of transportation, is on the rise, which will translate into growth for the wire and cable compounds market.

Segmental Analysis

Based on type, the global wire and cable compound market share is divided into two categories, namely halogenated polymers and non-halogenated polymers. The halogenated polymers type holds the largest market share in the global wire and cable compound market, and it is anticipated to grow at a CAGR of 7.36%, generating a revenue of USD 4,748.96 million in 2030.

Non-metallic elements or halogens, such as chlorine and fluorine, are used in halogenated polymers. PVC (polyvinyl chloride) and PTFE (polytetrafluoroethylene) are two crucial halogenated polymers (polytetrafluoroethylene or Teflon). Due to the widespread usage of PVC (polyvinyl chloride) and chlorinated polyethylene (CPE) in the manufacturing of wire and cables, the halogenated polymers segment accounts for more than three-quarters of the market.

Rubber made from halogenated polymers is widely utilized in applications that require strong solvent resistance. These polymers also produce plastics and as a binding substance in battery anode/cathode matrixes. There are many different halogenated polymers, each with its own applications. Poly (2-chloro-1,3-butadiene), fluorinated ethylene-propylene copolymer, poly(chlorotrifluoroethylene), poly(vinylidene fluoride), polyethylene, chlorinated, 25% Cl, poly(tetrafluoroethylene), and poly(vinylidene fluoride) are examples of halogenated polymers (chlorotrifluoroethylene). Therefore, this segment dominates the global market for wire and cable compound.

Based on end-users, the wire and cable compound market is divided into construction, power, communication, automotive, and others. The construction industry dominates the market and is anticipated to grow at a CAGR of 8.79%, generating a revenue of USD 5,984.88 million in 2030. Due to the increased construction activity in numerous countries worldwide, the wire and cable compound market is expected to grow rapidly. In the construction industry, wires and cables are widely utilized for electricity transmission in residential, commercial, and industrial structures. 

For example, wires are used to supply electricity to fans, air conditioners, lights, and other household equipment. The expansion of the wire and cable compound market is fueled by an increase in housing and other construction projects in Asia-Pacific and the Middle East. According to Timetric (GlobalData Plc), the construction sector in the Middle East and Africa is predicted to develop the quickest in the future years.

Impact of covid-19

Almost all businesses rely on wire and cable compounds. Increased demand from power generation, automotive, and construction industries are some of the primary market drivers. Prior to the COVID-19 pandemic, the construction and power generation sectors were booming due to expanding population and increasing consumer expenditure. This resulted in a risen demand for wire and cable compounds across the globe.

However, the occurrence of COVID-19 altered the economy drastically. The impact of COVID-19 on the various end markets became apparent amidst factory closures, construction delays and cancellations, and plummeting automobile sales, among other things. Furthermore, the closure of international borders disrupted the supply chain. Since most of the raw materials needed to manufacture wire and cable compounds are exported from particular economies such as China, it severely impacted the market. As a result, the market experienced a supply-demand crunch.

Additionally, the major end-use industries of wire and cable compounds, such as construction, power generation, and automotive, among others, had a significant impact on their production and sale as a result of reduced operational activity, a lack of workforce, and demand destruction due to government's restrictions. However, post-COVID-19, as the end-use industries recover, the wires and cable compounds market is also expected to recover.

Recent Developments

• April 2022– Solvay has made 11 investments and 3 acquisitions. The deals cost the corporation more than USD 6.88 billion. Solvay has made investments in various industries, including Display Technology, Renewable Energy Technology, Printed Electronics, and others.
• November 2021– Hanwha Solutions Corp., a chemical and energy unit of the South Korean conglomerate Hanwha Group, announced that it would consider selling a portion of its advanced materials business, excluding hydrogen tanks and electronics materials.
• June 2018­– Prysmian acquired all outstanding shares of General Cable common stock for USD 30.00 per share in cash, in accordance with the provisions of the merger agreement signed between the parties on December 3, 2017. General Cable has become a privately held corporation due to the deal, and its shares will no longer be listed on the NYSE or any other public exchange.