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Why the price of submaine power cable is so high?

According to Technavio released submarine power cable market research report, 2016-2020, global demand for submarine power cable market compound annual growth rate of about 5.89%. Among them, the raw material price fluctuations, increased demand for high-voltage direct current cable and to increase R & D investment to accelerate the global submarine power cable needs a steady increase in the three emerging trends.

By 2020, the offshore wind power industry is the most important submarine power cable end-use markets. Energy enterprises to increase investment in submarine power cables and construction in order to further improve the effectiveness of the transmission, and ultimately protect the land supply of electricity.

At the same time, global demand for renewable energy to increase investment, including tidal energy, wave energy, offshore wind power will continue to promote the growth of market demand.

A. Fluctuations in raw material prices

The main raw material for the production of submaine power cables are aluminum and copper. The cable itself is heavy and light materials industry, the impact of price fluctuations in raw material for cable manufacturers very direct. As of December 2015, the price of raw material costs accounted for nearly 85% of the submarine power cable production costs.

Among them, the cost of copper and aluminum production accounted for about 50% of total costs. Therefore, copper and aluminum and other essential raw material price fluctuations, fuel and energy costs coupled with price volatility cable manufacturers cost of sales and revenue have had a very big impact. To this end, the cable manufacturers try to reduce the impact of fluctuations in metal prices finished by negotiation price changes. Report that can be achieved by increasing the price of the product gross margin increased purpose, in order to reduce the risk of fluctuations in the cost of raw material prices, but only if the finished product market demand.
B. HV DC power cable sales increase

HV DC underground power cable is a viable option for long-distance high-voltage power transmission. The European Commission has selected 43 major energy projects to build cross-border infrastructure, in order to achieve a single energy market, to improve regional energy security. In these projects require a lot of power transmission from one European country to another. Thus, by 2020, the European market will become a major market demand HV DC power cable.

In addition, light weight, low loss characteristics makes HV DC power cables than AC power cables become more advantageous choice, especially in subsea power transmission market.

C. Increase R & D investment

It reports that the increase in R & D investment to promote the steady growth of future submarine power cable market demand for a major reason. The rapid growth of the market for offshore wind power development has created more opportunities. Different alternative energy sources require different types of power cables to achieve stable transmission of electricity.
Thus, cable manufacturers will continue to increase investment in new cable technology to achieve long distance Geng, more low-loss high-voltage power transmission.

Moreover, because the product homogeneity serious competition, cable manufacturers increasing new product development, to enable enterprises to remain competitive. The report also pointed out that the future development trend of submarine power cables (including HV / UHV power cable):

1. Designed to dry wet insulation shift cable conducive external environment conditions;

2. Low stress transition to high stress;

3. Lighter weight of submaine power cable;

4. Short delivery to long distance destinations.
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