Aluminum Wire Market Research, 2031
The global aluminum wire market was valued at $50.7 billion in 2021 and is projected to reach $69.7 billion by 2031, growing at a CAGR of 3.3% from 2022 to 2031.
Report key highlighters
- The global aluminum wire market has been analyzed in terms of value ($Billion) and volume (Kilotons). The analysis in the report is provided on the basis of type, insulation type, end-use industry, 4 major regions, and more than 15 countries.
- The global aluminum wire market report includes a detailed study covering underlying factors influencing the industry opportunities and trends.
- The aluminum wire market is fragmented in nature with few players such as TRIMET Aluminium SE, Novametal Group, Totoku Electric Co. Ltd., SouthWire, Heraeus Electronics, Sumitomo Electric, which hold a significant share of the market.
- The report facilitates strategic planning and industry dynamics to enhance decision-making for existing market players and new entrants entering the aluminum wire industry.
- Countries such as China, the U.S., India, Germany, and Brazil hold a significant share of the global aluminum wire market.
Aluminum wire is a typical form of wire used for electrical wiring in consumer electronics, household & industrial appliances, power networks, spacecraft components, and aircraft. It is simpler to handle when compared with copper wire since it is lighter and more flexible, making it a great material for long-distance wiring. Aluminum wire has greater electrical and mechanical properties and is less expensive than copper wire. Despite the fact that aluminum is not as conductive as copper, it is about a third of the weight, so an aluminum wire with half the weight of a copper wire would have the same electrical resistance.
Wires made of aluminum are used to transport power across the grid. Copper and aluminum have been utilized to transmit electricity from the production point to the consumption point. Wires made of aluminum are used to transmit electricity via overhead power lines. Multiple conductor wires, typically without insulation, can be utilized to transport power. Aluminum wires are suspended from pylons or towers above the ground. The diameter of these cables varies according to the amount of electricity being transmitted. The volume-based conductivity ratio of aluminum to copper is just 61%. However, aluminum can conduct twice as much electricity as copper based on its weight. Aluminum is therefore a cost-effective solution when it comes to transporting big amounts of electricity. Aluminum weighs 30% less than copper of equivalent volume. Due to the lower needed strength, aluminum wires are preferable as they greatly reduce the construction costs of pylons. Due to the low density of aluminum, the sag caused by its own weight is reduced, allowing the distance between two pylons to be increased. Due to these features, aluminum wires are preferred for electrical transmission.
Increase in the adoption of ethernet
The market for aluminum wires is expected to be driven by the rise in demand for industrial ethernet. This is explained by the increase in the use of broadband internet and the growing acceptance of the internet of things (IoT) and automation in various industries. The absorption of aluminum patch cables, also known as Copper Clad Aluminum (CCA) or CCE (for Copper Clad Ethernet), is higher than that of pure copper cables. Aluminum wires will be in high demand due to the widespread adoption of Ethernet. For instance, the industrial Ethernet market is predicted to reach $72 million globally by 2024, creating considerable opportunities for wire makers. Therefore, the market for aluminum wires will continue to expand with the surge in the popularity of ethernet.
The market for aluminum wire is being driven by the global expansion in power demand, which is generating a considerable need for wires and cables for safe and reliable operations. The mining industry's increasing demand for cables for effective power distribution to equipment in mining tunnels, huge shovels, and drills, among others, is driving market expansion. Moreover, increased investments in exploration operations and rising crude oil consumption are predicted to stimulate the mining industry, consequently fostering the expansion of the aluminum wire market. For offshore drilling systems, land-based drilling systems, and refining applications, the demand for aluminum wire is predicted to be significant in the oil and gas industry. This factor is anticipated to increase the demand for aluminum wire in the coming years.
Copper and aluminum are the principal raw materials used to manufacture cables and conductors. The cost of these raw materials makes for a significant portion of the total manufacturing costs caused by power cable manufacturers. In 2020, the price of aluminum decreased after the pandemic due to a demand-supply imbalance. Due to the altered supply-demand ratio in 2021, the price increased drastically. In April 2021, the aluminum price on the London Metal Exchange (LME) was $2,344.01 per ton. Due to the high proportion of raw material costs in total manufacturing costs, volatility in the price of aluminum (and other necessary raw materials, such as fuel and energy) causes significant fluctuations in the cost incurred, the number of units sold, and the revenue earned by manufacturers of aluminum wire and conductors. Vendors attempt to offset the impact of variable raw material prices on their profit margins by negotiating final product pricing changes. However, in such cases, increases in selling prices lag behind changes in the cost of raw materials. This delay is caused by the time required to apply essential adjustments to the pricing strategy for the customer. Thus, the volatility of raw material costs is a major factor hampering the expansion of the global aluminum wires market.
The global demand for aluminum wire has reached exceptional heights. In addition, improved construction methods and rising capital expenditures in the renewable energy industry would stimulate the global aluminum wire market. Increasing investment in grid interconnections, growth in power generation, and an increase in the use of aluminum wire to improve efficiency are a few of the causes that are driving up demand for the product in question. In addition, the growth opportunities of the global market have been enhanced by the corrosion and chemical resistance properties of aluminum wire.
The aluminum wire market is segmented into type, insulation type, end-use industry, and region. Depending on the type, the market is divided into all aluminum alloy conductor (AAAC), aluminum alloy wire, and aluminum conductor steel reinforced (ACSR). On the basis of insulation type, the market is divided into XLPE insulation, PVC Insulation, EPR insulation, and others. On the basis of the end-use industry, it is categorized into electronics and electrical, aerospace, automotive, building and construction, packaging, and others. Region-wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA.
The major players operating in the global aluminum wire market are TRIMET Aluminium SE, Novametal Group, Totoku Electric Co. Ltd., SouthWire, Heraeus Electronics, Sumitomo Electric, TT Cables, Arfin India Limited, MWS Wire Industries, Inc., and Kobe Steel Ltd. Other players operating in the market are Kaiser Aluminium, Vedanta Limited, RUSAL, Sohar Aluminium, and Axon' Cable.
The Aluminum alloy wire segment accounted for the largest share i.e., 50.2% due to the increasing demand from the automotive and transportation industries The global automotive and transportation industries are expanding rapidly due to the rising population and income levels in developing countries. This is causing an increase in the demand for aluminum alloy wire, which is widely utilized in these industries for a variety of applications, including wiring harnesses, cables, connectors, and switches. The all aluminium alloy conductor (AAAC) is the fastest-growing segment with CAGR 3.6%, this is due to increased energy demand and substantial investments in building construction. In addition, the increase in expenditures for smart improvements to power transmission and distribution systems and the creation of smart grids raise the demand for AAAC.
The PVC insulation segment accounted for the largest share i.e., 40.6% because PVC insulated is a cable with Polyvinyl Chloride insulation. PVC insulation extrudes over the conductor to render it resistant to moisture and chemicals. This form of insulation has a high dielectric strength, which means that it can sustain high voltage without failing. PVC Insulated Cable is utilized in several industrial and commercial applications where safety and dependability are crucial. The XLPE insulation segment is the fastest growing segment with CAGR 3.6%, this is due to high thermal short circuit rating, excellent electrical property maintained over the entire temperature range, resistance to thermal deformation at high temperatures, excellent water resistance and low permeability to water, excellent chemical resistance, high durability, and long operational life are some of the properties that are driving the expansion of the XLPE insulation material segment.
The electronics and electrical segment accounted for the largest share i.e., 38.8% because, electrical equipment includes any apparatus, cable, appliance, conductor, fitting, insulator, material, meter, or wire used for controlling, generating, supplying, transforming, or transmitting electricity at a voltage greater than extra-low voltage or powered by electricity at a voltage greater than extra-low voltage. The rapid pace of technological advancements in the electronic industry generates a constant need for better and faster electrical and electronic equipment. The building and construction segment is the fastest growing segment with CAGR 3.8%, Aluminum wires can be utilized in residential and non-residential environments for wiring and connecting. These wires are simple to install, maintain the integrity of electrical circuits and can resist high temperatures during a fire, ensuring the safety of humans. A rise in demand for aluminum wires has resulted in an increase in building safety awareness among the general public. These lines are utilized in the power distribution of nearly every commercial and residential structure. The market for aluminum wires in the building & construction industry is being driven by an increase in construction activity.
Asia-Pacific garnered the largest share i.e., 70.2%. Rapid industrialization and rising power consumption in the region have raised the demand for ACSR cables, and these factors are anticipated to continue to drive revenue development in the region throughout the projected period. In addition, China is the top consumer and producer of ASCR and aluminum in the world, and this is projected to be a major contributor to the region's market expansion.
Key potential factors that drive the aluminum wire market demand:
The aluminum wires market is in a growth phase and is experiencing intense competition from industry participants. In order to attract attention and keep ahead of the competition, market participants are producing unique aluminum wire goods. For instance, in October 2021, Furukawa Electric Group, a Japanese maker of aluminum wire, collaborated with Toyota Boshoku Corporation to install aluminum electrical wire in wire harnesses (WHs) for the new Toyota Land Cruiser 300 automotive seats. This technique employs the Alpha Terminal Series, which is remarkably resistant to corrosion. The wire harnesses (WHs) for this model's seats use aluminum electrical wire in 115 of 152 circuits (a 75% aluminum adoption rate), reducing weight by 44% and contributing to improved environmental performance in the automotive industry. In addition, in May 2020, Heraeus Electronics, a developer of material solutions for electronic packaging, introduced CucorAl Plus, a wire of the next generation for power applications. CucorAl Plus is a copper-core aluminum wire with enhanced electrical and mechanical qualities, as well as enhanced processability.
In the global market for aluminum wires, an increasing number of companies have adopted strategic partnerships or acquired other firms in order to expand the market or develop new products. For instance, in November 2021, Elcowire, a Swedish maker of aluminum wires, acquired the wire and rod business of KME Group, a German manufacturer of electrical aluminum conductors, rectangular wire, and profiles, for $670 million. The acquisition of KME's Rod and Wire business by Elcowire will increase the company's customer base, product selection, and geographic reach. Also in February 2019, Rea Magnet Wire Firm, an American maker of magnet wire and nonferrous metals, joined with Xignux, a Mexican company whose subsidiary Magnekom manufactures copper and aluminum cable. Following the merger, the assets of both firms, as well as operational and supply chain synergies, including a facility for enamel production, will be merged.
Key Benefits For Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the aluminum wire market analysis from 2021 to 2031 to identify the prevailing aluminum wire market opportunities.
- Market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the aluminum wire market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global aluminum wire market trends, key players, market segments, application areas, and market growth strategies.
Aluminum Wire Market Report Highlights
Market Size By 2031
USD 69.7 billion
CAGR of 3.3%
2021 - 2031
By Insulation Type
By End Use Industry
Key Market Players
MWS Wire Industries, Inc., Novametal Group, Heraeus Electronics, Totoku Electric Co. Ltd., Kobe Steel Ltd., Arfin India Limited, SouthWire, TT Cables, TRIMET Aluminium SE, Sumitomo Electric
According to the insights of the CXOs of leading companies, properties of aluminum wires such as lightweight, anti-corrosion, and anti-oxidation, have contributed to the market's expansion. Enameled, fiberglass, paper and nomex, insulation across a variety of industrial segments is also responsible for the market expansion of aluminum wire. Rising demand for aluminum in a variety of sectors is the major factor driving the growth of the aluminum wire market. Construction, electrical distribution, communication, and broadcast networks, among others, are among the industries that contribute to the expansion of the industry. Having a greater risk of home fire than other types of wire copper is one factor hindering the market expansion of aluminum wire. In addition, the expansion of the automobile industry will generate substantial demand for aluminum wire, creating a growth opportunity for the expansion of the aluminum wire market. The expansion of the copper wire industry creates challenges to the expansion of the aluminum wire market.