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Chinas power cable and fiber optic cable storage capacity risk

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Chinas power cable and fiber optic cable storage capacity risk

Date of release:2018-12-20 Author: Click:


The main factor in the current instability of the domestic cable market is overcapacity. According to statistics, as of last year, the domestic cable industry overcapacity exceeded 40%, saying that the serious point is life and death. As we all know, an industry's capacity utilization rate below 80% can be called overcapacity. At present, the capacity utilization rate of the wire and cable industry is around 60%, and the overcapacity phenomenon is already very serious. Even so, there are still a number of projects under construction and proposed in China, and the overcapacity in the cable industry will become more and more prominent. Not only in the wire and cable industry, but also in the fiber optic cable market.

Reasons for overcapacity in the cable industry

First, cable manufacturers have significantly contributed to the production of local GDP, coupled with the low barriers to entry, the vicious investment competition between regions, and the lag in system reform, resulting in continuous expansion of production capacity and oversupply.

Second, the domestic cable industry has a low level of technology and a weak independent innovation capability. This makes the competition among cable manufacturers mainly reflected in the expansion of resource input and output, as well as the price competition, rather than focusing on the improvement of independent innovation capability and quality.

Third, due to the certain time lag from the input of production factors to the formation of production capacity, when the market demand in the future is promising for a long time, many enterprises in order to avoid losing market opportunities, the capacity planning is generally moderately ahead of market demand, and part of the production is “hidden”. Capacity, resulting in excess capacity before the peak of market demand.

Risk of overcapacity in power cables

At present, the overcapacity of the power cable industry is very serious, the industry is in a bloated state, the conventional cable is severely squeezed, and the new product technology is not mature enough to be in the bottleneck period.

Most of the power cable industry invests in high-voltage and ultra-high-voltage projects, and the high-voltage and ultra-high-pressure project cycles in the past two years are mostly about one year. In other words, the capacity expansion effect of these power cable UHV projects invested in the past two years will be released in the next two years, which will bring some pressure to the high-end field of the power cable industry.

According to statistics, there are about 200 companies with high-voltage cable production capacity in the world, and about 78 companies with high-voltage production capacity in China, accounting for 40% of the world.

Overcapacity in cable products will inevitably lead to a decline in profit margins and low-cost competition, while low-cost competition will cause problems such as cutting corners. At present, the Chinese market has formed the world's largest cable recycling industry chain. The cable that has been retired abroad has been purchased, and some materials are added to make cables. In addition, many domestic cable companies have even added recycled materials in the production process of optical cables, and they are normalized. Only a small number of exported cable products do not use recycled materials. This degree has seriously affected the vital interests of the upstream cable industry, raw material suppliers. They resentfully said that due to the lower and lower quality requirements of the products, the income from the sale of raw materials of three to five tons in the domestic market is still less than the return of one ton of exports. .

Risk of overcapacity in fiber optic cable

In August last year, the State Council issued the “Broadband China Strategy and Implementation Plan”. For the first time, broadband was positioned as a strategic public infrastructure, and broadband development goals and paths were deployed for the next eight years. The broadband strategy thus rose from a single department to a country. strategy. In December of the same year, the Ministry of Industry and Information Technology issued a 4G license to announce the advent of the telecom 4G era. The "Broadband China" strategy and 4G will surely bring a new round of high-speed development in the optical communications industry, which will drive the development of the fiber optic cable industry, which is a good news for the domestic cable industry.

However, as of now, despite the strong demand in the fiber optic cable industry, due to the limited product properties of fiber optic cable, the life cycle of the fiber itself is about 50 years, and once a product is updated or replaced, the demand will be significantly weakened, and the industry will Directly towards the flat, so the current China's fiber optic cable industry is developing very well, but the production and demand of fiber optic cable has exceeded 100%. After the capacity expansion period, the industry is likely to be quiet. Therefore, in the long run, the market prospects of the industry are not optimistic.

The overcapacity of fiber optic cable is divided into two aspects, one is the expansion of the capacity of optical fiber preforms, and the other is the capacity expansion of fiber optic enterprises. In terms of optical fiber preforms, in the past two years, due to the industry's glory, the industry has expanded in recent stages, and these expansions will be released in the near future.

In terms of capacity expansion of optical fiber enterprises, last year, under the stimulation of the market, many optical fiber companies in the industry, Hengtong Optoelectronics, Zhongtian Technology, and Fiberhome Communications, both had large expansion operations in 2012, all of which expanded, and eight major enterprises accounted for the total. The market size is 95.71%; Changfei's capacity expansion is estimated to reach 32 million core kilometers, reaching 17.78% of the total market expansion.

In terms of fiber capacity expansion, domestic fiber production capacity exceeded 180 million core kilometers in 2013, an increase of 27.54% year-on-year. The newly added capacity in the past year includes not only the 7 million core kilometers capacity of Changfei, the original industry enterprise, but also the 8 million core kilometers capacity of Hengtong. There is also a new capacity of 10 million core kilometers of Kaile Technology, which has entered the fiber industry. In the domestic industry supply and demand, in 2013, the capacity of 180 million core kilometers of fiber has already met the domestic demand of 147 million core kilometers of fiber.

For the entire wire and cable industry, whether it is the overcapacity of power cables or the overcapacity of fiber optic cables, it has laid a hidden danger to the domestic cable industry, which has restricted the fair, healthy and sustainable development of the domestic cable industry. Despite the positive news of the “two sessions”, the capacity that can be consumed may be limited compared to the overcapacity of the industry and the technical gold content of the products.

2 input and 2 output horizontal connection boxes

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Key word:Fiberopticcable,Fiberopticcableprice,Fiberopticcablesupplier

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