The wire and cable industry is currently facing its most severe challenges, with raw material prices—especially copper, aluminum, and plastics—reaching unprecedented levels. The steady rise in copper prices has placed immense pressure on manufacturers, significantly increasing production costs. This situation is unlikely to improve in the near future. Industry experts suggest that China is entering the early phase of heavy chemical industrialization, and with the arrival of the high-cost era, rising input prices have become an unavoidable trend. While demand remains strong, the expectation for raw material prices to return to previous levels is unrealistic. To address this, improving market mechanisms and implementing effective government interventions are essential. Tackling issues like monopolistic behavior and speculative price hikes is crucial not only for the healthy development of the national economy but also for creating a fair environment for the wire and cable sector. Given that materials such as copper, aluminum, and plastics account for over 80% of the total cost of wire and cable products, their sharp price increases have directly driven up production expenses. When combined with rising energy, transportation, and labor costs, the financial burden on companies has become overwhelming. As production costs soar, it's difficult for companies to raise selling prices without losing competitiveness. This has led to increasingly fierce market competition, particularly in the low-end segment where product differentiation is minimal. Price wars have become common, and some companies are already suffering losses. Industry insiders point out that the root cause of this low-cost competition lies in excessive investment, overcapacity, and market saturation. With a low entry barrier, numerous enterprises have flooded the market, leading to overproduction and a serious imbalance between supply and demand. It is estimated that there are over 5,000 companies in the wire and cable industry, many of which operate with excess capacity. Moreover, the low threshold has allowed unqualified players to enter the market, producing substandard products that undermine fair competition through price undercutting. These counterfeit goods further disrupt the market and make it harder for legitimate businesses to survive. Recently, several cable companies have reported that they can no longer afford the high copper prices, with some even halting production. Despite this, there are still orders in the market, but customers are reluctant to accept higher prices due to the increase in copper costs. Some companies have signed contracts with fixed pricing, meaning they must fulfill orders even if it leads to losses. This situation has led to what some call a "hidden loss" within the industry, and the term "overlord clause" has been used to describe these unfair contractual terms. With aluminum ingot prices surging last year, the domestic cable industry has faced a major crisis. Many companies are now calling on power grid operators to revise bidding processes and adjust contract prices to help them survive. As the situation continues to worsen, the industry is in urgent need of support and reform to ensure long-term stability and growth.
Taizhou Hongchuang Hardware Co., Ltd. , https://www.taizhouhongchuang.com