The global aluminum wire market is anticipated to witness significant Growth. Increasing penetration of aluminum wire in lightweight vehicles is projected to benefit the aluminum wire market over the coming years. The commercial and industrial application of aluminum wires started in the mid-1960s, since then products has witnessed increased adoption rate and positive trend in the market. Aluminum is a more cost-effective and lighter option for cables in comparison with copper and is also softer and can have less damage during installation.
Over the last few years, copper wire and cables are increasingly replaced by aluminum wire and cables. For overhead transmission cables, aluminum is more suitable compared to copper due to its lighter weight. It also offers cost advantage in underground power transmission cables. Aluminum alloys including series 8000, series 1350 and series 6201 are likely to witness growing demand in these applications.
Oxidation in aluminum creates a surface coating which can lead to excess heating. Fire hazard conditions owing to these attributes represents a major challenge in the market. Many companies are focused on new aluminum alloys, and changes have been done in order to expand the aluminum wire industry.
The aluminum wire market is continuously working on the development of new alloys for applications in buildings & construction, transportation, packaging, and others. Automobile manufacturers are under continuous pressure, owing to greenhouse gas emissions regulations for environmental protection. These regulations are expected to tighten over the coming years. For this, automakers are working on the improvement of fuel efficiency and the reduction of vehicle weight through the use of aluminum and magnesium.
Increasing use of aluminum fasteners in recent years, has led to increased demand of aluminum alloy wires. Many organizations are working on the development of such alloy wires. For Instance, Furukawa Electric has developed a new alloy which consists of aluminum along with iron, copper, and magnesium. It has properties such as flexibility, conductivity, weldability, bending ability and mechanical strength which are essential for wire harness in automotive.
Based on the grade, the market is segmented into electrical, alloy and mechanical. The extensive demand from automobile battery cables and overhead power lines is expected to drive the growth of electrical grade in this segment. Electrical wires also have demand from commercial, residential and industrial sectors.
Growing requirement of electricity and strong power distribution network in emerging economies are likely to benefit aluminum wire market. As per the International Energy Agency, China is projected to consume nearly double amount electricity by 2040 compared to current consumption. Also, power generation capacity in China is likely to grow from 1,625 GW in 2016 to 3,188 GW in 2040 indicating high growth potential for market vendors in the country.
Based on the application, the market has been segmented into automotive, transformers, electrical appliances, motors & rotating machines, home appliances, shipping, switches & meters, and others. Low weight attributes make aluminum wire suitable in aircraft and automobile applications. Demand for wiring systems in electrical and hybrid vehicles is expected to rise over the forecasting period. Applications such as voice coils in speakers and headphones, power cables and high-frequency coaxial application are expected to boost the demand for copper-clad aluminum wire.
On the basis of geographic regions, the market is classified into North America, Europe, Asia Pacific, Central & South America, and Middle East & Africa. Growing consumption of power and construction of new electricity lines is expected to contribute to the growth of the industry. Demand from residential wiring is projected to rise over the coming years. North America and Europe regions are major consumers in the industry while major of the demand coming from automobile and household electrical appliances.
Asia Pacific countries such as China, India, and Japan are expected to exhibit strong growth over the next seven years. Increasing consumption of electricity supported by the growing population, rising industrial expansion and demand for automotive vehicles are the major drivers for the region. Significant investments are expected to pour in the development of advanced aluminum alloys for a variety of applications. The rising expenditure for construction and infrastructure sector is expected to stimulate the aluminum wiring consumption in the market.
Another key driving factor for aluminum wire market is rising demand of electric and hybrid vehicles in Asia Pacific region. China is projected to witness maximum growth in this automotive segment. As per the International Energy Agency, global stock of electric passenger vehicles accounted for 5 million. Out of which, nearly 45% of vehicles i.e. 2.3 million are present in China followed by Europe and the U.S. with share of 24% and 22% respectively.
Electric vehicles market is likely to offer numerous opportunities for market vendors over the forecast period. For instance, in 2017, Australia based Gebauer & Griller GmbH was awarded with a contract with Tesla, under which the company supplied around 3,000 tons of aluminum shielded cables to Tesla.
Various companies in this industry are expanding their business by concentrating on acquisitions of small and medium enterprises. Further, investments in research & development activities is expected to create opportunities in the market space. Many vendors are focused on the development of new aluminum alloys for the automotive sector. The key market participants include Kaiser Aluminum Corporation,Sumitomo Electric Industries, Ltd, Novametal SA, Sam Dong America, Norsk Hydro ASA, Axon' Cable, Southwire Company, LLC, Vedanta Limited, Vimetco NV, RUSAL, DUCAB, and LWW Group.
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