[Report] Polymer Materials & Structure Market Research, Trends, Analysis

INTRODUCTION

This report, an update of a 1999 BCC report by the same author, presents the findings of a detailed analysis of the U.S. market for polymers that are used in the wire and cable industry, primarily for wire and cable insulations. Because of the increasing use of fiber optics (FO), which are replacing copper wire in many applications (especially in telecommunications), we also include detailed analysis of both of polymeric materials used to insulate and cover FO cables and plastic/polymer optic fibers (POFs). POFs are finding increasing acceptance as replacement for both traditional copper conductor and for older glass (silica) optical fiber in short length applications such as in automotive wiring.

The U.S. wire and cable industry continues to undergo major technological and societal changes in its markets; these are causing subsequent design and commercial changes in several areas.

Technological changes that are affecting the industry have primarily been in communications, where fiber optics continue to replace copper wire, and in plenum wire where special insulation is required to withstand potential high temperatures and toxic combustion products. The biggest current dynamic of the past decade or so has been in communications wire and cable, where the information technology (IT) explosion and conversion to fiber optics continues to change the form of wiring used for communication information transmission.

Perhaps even more interesting are the societal changes that are occurring at this time, primarily the explosion in wireless technology. This is presently going on in two areas. The first is telecommunications, where wireless telephony (cellular phones) have taken the country and world by storm, to the point where today there are almost as many cell phones in use in the United States as hard-wired phone circuits. The other is in IT, where wireless networks (so-called "Wi-Fi" network systems) are increasingly competing with wired local and wide area networks (LANs and WANs) to connect computers and other data working devices. The real and potential effect on the wiring market can be seen immediately.

Both of these types of changes affect our analysis and make it more uncertain and difficult. The fiber optic explosion of the late 1990s resulted in competing companies laying thousands of miles of fiber cables, most of which (some experts say 90% or more) are still unused. This does not bode well for growth in this market over the next few years. And the wireless situation, both in telephony and in IT networks, cannot help but have some effect on the wire/cable market. Perhaps not in mainline distribution systems to buildings, but certainly inside many buildings, especially private homes where people are jumping at the chance of avoiding wiring PC and other home networks. Some present concerns over wireless, including security and dependability, have dampened its growth somewhat, especially for businesses, but the threat is real and growing.

STUDY GOALS AND OBJECTIVES

Metal-conductor, mostly copper-based, wires and cables are old and established products, and their manufacture and sale has become a moderately large and quite broad-based sector of the United States economy. Until recently almost all wire was copper, which is both an excellent conductor of electricity and a corrosion-resistant material.

However, no matter how important the conductor is, most wire or cable needs protective covering and insulation. In recent times these materials are all polymers. Actually, polymeric materials are important in wire and cable fabrication in two ways:

The first is the old and established (but technologically advancing none the less) industry of wire and cable insulation and protection, the materials used to encase and enclose copper wire; the polymeric resins and elastomers used to insulate wire and cable are the primary focus of this study.
The second is replacement of copper in some important applications by optical fibers (OFs); most of these are glass fibers, but plastic (or polymer) optic fibers (POFs) are also finding uses and are growing in popularity. The effect of the switch to OF has two effects on polymer products: smaller diameter OFs mean less insulation needed, and switching from glass to plastic OF means more polymer used as the conductor.

The broad base of the U.S. wire and cable industry is illustrated both by the many different polymer materials that are used to make wire and cable insulation, and also by the many different markets that are served by these materials and products.

This study is an update of a 1999 BCC study of polymeric wire and cable materials and their markets, in which we bring up to date the state of the industry and BCC's estimates and forecasts for U.S. markets for base year 2003 and forecast year 2008. The U.S. copper wire and cable industry is generally considered to be a mature one that generally follows the ups and downs of the U.S. economy, since wire and cable is used in both consumer products (e.g., autos and appliances) and in commercial buildings and equipment. All these are the items that define the growth of the U.S. economy, and wire and cable generally grow or don't grow at about the same rate as the economy as a whole, measured by Gross Domestic Product or GDP. However, some new developments, especially in the IT and POF end of the business, had stronger growth in the late 1990s, followed by collapse in 2000 and some new strength showing now. It is our goal in this report to give the reader a comprehensive update on the state of the U.S. wire and cable industry and the polymeric materials from which such products are made, and where BCC believes it is headed at the start of this new century, with market predictions and forecasts to year 2008.

Wire and cable insulation is made from many different polymeric materials, both elastomeric and non-elastomeric (that is, insulation materials that may or may not stretch) both natural (e.g., natural rubber) and synthetic, and among the synthetics, both thermoplastic and thermosetting polymers. Because of this diversity of materials we place major emphasis in this report on these polymeric materials, their properties, manufacture, and markets.

Our objectives include:

To describe the wire and cable industry, its importance to the functioning and quality of life, and its future prospects. We include a brief historical perspective on the industry and the materials used in it.
To describe many different types of wire and cable products, the polymeric materials with which they are insulated, and their major end-use markets in the United States. We describe, discuss, and forecast markets for major types of wire and cable by type of polymer used and by several of the important major applications. This includes elastomers and plastic resins used to insulate wire and cable as well as POFs.
To analyze and estimate industry production and shipments in base year 2003 and forecast growth to 2008 for polymeric wire and cable materials and their applications markets. This analysis describes and demonstrates major trends in end uses.
To describe manufacturing methods used to manufacture the most used polymeric raw materials for wire and cable insulation and POFs.
To identify and profile some of the major suppliers of polymeric materials and products for the wire and cable industry.
To describe wire and cable technology and trends. This includes both polymer and wire and cable production technology. We try to identify some new innovations and developments that can affect the growth or decline in demand for materials used and applications.
To note and discuss come of the major dynamics in the industry, including industry concentration, inter-material competition, and some international effects on the U.S. industry.
To discuss some environmental and regulatory issues and factors that affect the wire and cable industry, including standards that affect manufacture and quality.

This study focuses primarily in the United States but also, as noted above in our objectives, has some international observations, given the increasingly global nature of business and trade these days, when no nation or region can operate without consideration of the rest of the world. However, most of the products covered are American in nature and production.

REASONS FOR DOING THE STUDY

The wire and cable industry, despite its maturity and modest overall growth rate, is in actuality a very dynamic industry, despite the rather staid general impression of home wiring, automotive wiring, electrical transmission cables, and other such common products. Several important changes have occurred in this industry in recent years, and they continue; in fact, their pace will probably increase, especially with the continuing explosion in telecommunications and information technology (IT) and the effect of wireless communications. New technologies can compete for the same markets, such as wired vs. wireless telecommunications, and this makes for interesting markets and forecasts.

Both newer and older materials compete for places in the wire and cable market. The major competitive factors in the market are those between materials and technologies. Inter-material competition is a way of life in a technologically advancing society, and wire and cable markets are no exception. There is strong competition and significant overcapacity in several sectors (such as in fiber optics, noted above), and new technologies and products are striving for market share, especially in IT and the fiber optics-copper wire battle. For example, high performance thermoplastics like fluoropolymers and nylons are finding new uses where their properties justify their cost.

BCC performed this study to provide a comprehensive and updated reference for those interested and/or involved in the wire and cable industry, and those that both serve and benefit from this industry. This is a wide and varied group of personnel in companies in many industries ranging from basic polymer manufacture to Internet providers, both for original equipment manufacture (OEM) and for those involved in the maintenance, repair, and operations (MRO) aftermarket business. We have sorted through, organized, and condensed information from a large amount of literature and other reference materials to compile this report.

CONTRIBUTION OF THE STUDY AND FOR WHOM

Because of the size and diversity of polymeric wire and cable materials, products, and markets, this report should be of interest to a wide group of organizations and individuals, people who are involved in the development, design, manufacture, sale, and use of wire and cable and materials, as well as politicians of all stripes and the general public. BCC feels that this report will be of value to technical and business personnel in the following areas, among others:

Marketing and management personnel in companies which produce, market, and sell all types of polymers to the wire and cable market, as well as those involved in installing equipment and parts, components, and maintenance materials.
Companies which supply, or want to supply, equipment and services to wire and cable materials and equipment supply companies.
Financial institutions that supply money for such facilities and systems, including banks, merchant bankers, venture capitalists, and others.
Personnel in end-user companies, communities, and industries that purchase and use wire and cable. This includes substantial industries such as building construction and telecommunications.
Personnel in government and standards-writing organizations. Local, state, and federal officials are all involved in writing and enforcing standards to ensure and protect public health and safety and the environment. Since much wire and cable is used in public buildings, private homes, and sensitive places like in commercial and military aircraft, the public must be assured that it is made and used in a proper and safe manner.

SCOPE AND FORMAT

This BCC study covers in depth many of the most important economic, technological, political, regulatory, and environmental considerations in U.S. markets for the use of polymeric materials used in the manufacture of wire and cable. The polymeric products are made from several different polymers, almost all synthetic, both elastomeric and non-elastomeric. Polymers covered include thermosetting elastomers, both natural and synthetic rubbers, and thermoplastic wire and cable materials, the latter both elastomeric and non-elastomeric.

Our study includes key technologies (and new technologies), the markets, and key player companies that make up the U.S. wire and cable industry in all its ramifications. This is primarily a study of activities and markets in the United States, but because of the global nature of most industries these days, it touches on some noteworthy international activities. These are primarily those that can have an impact on the U.S. business and markets, primarily the activities of foreign-based companies and technologies in U.S. markets.

We estimate demand data for our base year of 2003 and forecast for five years to 2008. Markets are all analyzed and projected in volumes in millions of pounds. Five-year growth rates are all compounded (signified as average annual growth rates or AAGRs). All final market figures are rounded to the nearest million pounds, and because of differences between small numbers the AAGRs shown may be different from the rounded volumes shown.

This report in segmented into ten sections, of which this is the first.

Next is the Summary, which encapsulates our findings and conclusions, and includes the summary major market table. It is the place where the busy executive can find the major findings of the study in summary format.

Next is an introduction and overview of the wire and cable industry. We describe the major types and markets for wire and cable in the United States. Polymeric materials find application primarily in wire and cable insulation and in polymer optic fiber materials.

The first of our market analysis sections is devoted to analysis of markets by polymeric materials used. We analyze U.S. markets by physical volume in pounds. In this section we introduce and discuss in some detail the principal polymers used.

The next section looks at wire and cable markets by some of the most important applications. These include electronics and apparatus, power distribution, buildings, magnets, telephone/telegraph, and the new and burgeoning market for POFs. We also forecast the sub-market for polymers used in high temperature wire and cable, a growing market.

The next section is devoted to wire and cable technology, with special emphasis on the manufacture of polymeric materials and wire and cable products. We cover the basic technologies of rubber and polymer manufacture as well as wire and cable fabrication. We end with discussion of some technical innovations in wire and cable.

Next we look at the structure of the U.S. wire and cable industry. We discuss competition among materials and note some international aspects that affect the U.S. industry. Next comes a discussion of environmental, regulatory, and public issues that affect the wire and cable industry. These include important standards, for wire and cable manufacture, which are designed to protect the public, regulatory issues, and some ongoing environmental issues.

The last narrative section is devoted to information about some of the most important major suppliers to this large industry, with profiles of these suppliers. We profile wire and cable fabricators and producers of polymeric materials used in wire and cable fabrication.

Finally we include an Appendix with a glossary of some important terms, abbreviations, acronyms, etc. used in the wire and cable industry and related technologies.

The polymeric materials covered in this study are primarily used to insulate electric wire and cable and as conductors in polymer fiber optic lines; thus we restrict our scope to polymers that are actually part of a finished wire or cable. We do not include other materials used in fabrication of either the polymers or the wire and cable; we do not cover materials such as fillers, plasticizers, and other plastic and rubber additive and processing chemicals.

We also do not cover wire and cable connectors or plastic conduit tubing sometimes used to encase wires or cables; the latter is covered in a companion BCC report, P-043Z The Competitive Pipe Industry, recently updated and published in September 2003. Our scope in wire and cable covering is also limited to insulation and jacketing for electrical wire and cable; thus we do not include covers for push-pull cables, such as those used for mechanical connections to engine throttles and other similar jobs.

METHODOLOGY AND INFORMATION SOURCES

Extensive searches were made of the literature and the Internet, including many of the leading trade publications, as well as technical compendia, government publications, and information from trade and other associations. Much product and market information was obtained from the principals involved in the industry. The information for our company profiles was obtained primarily from the companies themselves, especially the larger publicly owned firms. Other sources included directories, articles, and Internet sites.