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 Aluminium Overhead Conductor Market SegmentStabilising at Very High LevelsSeparate and distinct from all of the trade analysis we have presented so far, we conclude our trade flow analysis with a brief review of the aluminium bare overhead conductor market. As mentioned at the start of this article, trade flows in overhead conductors are much less representative of underlying world market conditions as less than 10% of the market is traded. Much of demand for these largely simple conductors is met by local manufacturers within China, India, Brazil, Russia, Indonesia and the United States who manufacture these conductors to national or international specifications.
World demand for aluminium bare overhead conductors has been booming since 2009, when China began to aggressively expand its power transmission grids, especially in rural areas. Grid expansion, reinforcement, repair and maintenance, renewables interconnection and international grid connection links are powerful global drivers of overhead conductor demand. As orders for transmission lines are mostly project based, it is much more ‘lumpy’ than the insulated wire and cable business. Through 2011 there have been some spectacular months of export growth with year-on-year increases of 60% seen in March and April, a peak of 127% in May and 80% as recently as July. In August and September the rate of year-on-year growth has normalised as it was at this time last year that the most intense phase of the boom began. The rate of year-on-year trade growth slowed to 4% in August and September. But Russia, Indonesia, India, Brazil and the United States are all growing very strongly this year and CRU expects world demand will grow by between 15-20% in 2011.
Another Global Recession is UnlikelyThe probability of another global recession is low but finite, however the chances of a misfiring, uneven two speed recovery is more than likely. Political inaction, policy deadlock and instability in the global financial system are not supportive to business and consumer confidence. The world recovery is certainly in trouble, but the prospects and opportunities for the wire and cable industry lie never more than before in industrialising markets where construction and infrastructure projects will continue to drive growth. The first phase of the recovery from recession is clearly over; however we are now entering an uncertain middle game with chances of either re-entering recession or enduring a prolonged period of low growth.
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