SHANGHAI Chinese demand for copper wire and cable has taken a hit as construction of the countrys extra high voltage (EHV) national electrical grid has ground to a halt due to authorities failure to approve projects.
The promise of the system in terms of copper wire demand has been high. Liu Zhenya, general manager of State Grid Corp., had indicated in April that China would invest more than 3 trillion yuan ($491.2 billion) to build the national grid over an eight-year period that began in 2013.
But many in the power supply business said that real progress on EHV, a grid that carries an alternating current of 1,000 kilovolts or a direct current of 800 kV, is a long way off.
Typically, power project assessments should take 45 days, industry sources said, but in fact several EHV projects are still awaiting decisions despite being submitted for approval by authorities more than a year ago.
China Electric Power Research Institute has submitted several proposals to the China Development and Reform Commission for approval, but has yet to receive feedback, CEPRI chief engineer Yin Yonghua said.
And there are several different trends at play with demand for copper wire.
"Once construction of National Grid and China Southern Power Grid gradually heads into a mature phase, electricity capacity growth is expected to slow down after the 12th (national) five-year plan," Jiang Huajun, general manager of Far East Cable Co. Ltd., said in late November at the second Asian High-end Cable Summit.
The consumption of copper wire and cable by the power grid industry has also been gradually decreasing since 2009, Jiang said. The power grid consumed 15.1 percent of the countrys copper wire and cable in 2012, down from 21.5 percent in 2009. The figure for "2013 is expected to be 14.1 percent, and 2020 may show a further fall to 7.8 percent," he added.
By 2020, demand for copper wire and cable for use in the traffic control and manufacturing industries will have slowed down, but the share consumed by heavy industry, construction and telecommunications will have risen to 34.3 percent, 24.1 percent and 26.7 percent, respectively, according to Jiangs estimates.
With state support for new energy sources, marine engineering, high-end equipment, electrical and information engineering, the value of Chinas wire and cable market is estimated to reach 808.89 billion yuan ($133.67 billion) by 2020.
A version of this article was first published by AMM sister publication Metal Bulletin.