J A N U A R Y 2 0 2 1 | W W W. W I R E N E T. O R G
2021 THE YEAR TO COME
O F F I C I A L P U B L I C AT I O N O F T H E W I R E A S S O C I AT I O N I N T E R N AT I O N A L
2021
The industry pulse is good Covid-19 has understandably dominated world headlines, but its ability to roil industry appears more limited. Manufacturers who were asked about their 2021 market outlook were generally optimistic, most seeing the pandemic as yet another business challenge. This feature presents a range of views and two forward-looking elements.
For manufacturers, the dominant theme for 2021 is optimism The James Monroe 2021 outlook is very bright and promising. We have had a lot of positive discussions on new opportunities and projects, and we are expanding our product offerings. Being a small- to mid-size company allows us to be flexible and provide quick David Fisher responses to quote requests. We are constantly looking for expansion opportunities and will be hiring more employees. Now that our new plant is complete and operational, we plan to focus on the same business model that has found us great success in recent years. We will continue to listen to our customers base and their needs, and provide what they want, when they want it and at a fair price. If the media would stop trying to drive the response to Covid19, our industry would be in even better shape. Covid-19 is not going to be a factor. It will only affect our internal procedures as it will with most businesses relative to masks, other PPE products and social distance rules. David Fisher, president, James Monroe Wire & Cable. In the face of uncertainty this past year, we decided to increase investments in people, R&D, service and logistics because of the belief that they will position us ahead of our competition. Once the pandemic winds down, we expect
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that the growth in connected devices, smart buildings, and automation will accelerate. Demand for bandwidth in these applications will depend, in no small part, on a QuabbinŽ stranded copper cable. We intend to have them available when and where our customPaul Engel ers need them, faster than ever before. As a private business for the past 46 years, we learn something each time we go through tough times. And Covid-19 was worse than anything we’d seen before. We learned that our knowledgeable people, good customer relationships, a strong community, and long-term suppliers meant we could get through it safely, and that we would be better for it in the end. Our future business plans aim to stay true to the principles that got us through Covid-19: be responsive and dependable to our customers when they need us most. For all the above reasons, we are optimistic for 2021. Paul Engel, CEO, Quabbin Wire & Cable, Co. Our outlook for 2021 is very positive. Not only is COPPERWORKS preparing operationally and commercially to more than double our volume, but the majority of our customers are extremely bullish with their 2021 forecasts. They have reported a lot of pent-up demand that is
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F E AT U R E
A S S O C I AT I O N P E R S P E C T I V E S From the American Wire Producers Association perspective, it’s fair to say that 2020 seemed to set a record for the number of events that impacted business. There was the trade war with China, the steel tariffs, the passing of the USMCA and the alarming spread of Covid-19. The highly contentious U.S. presidential election was another factor, and now a new administration will address the current 232 and 301 tariff policies. Those tariffs benefited some and hurt others, and what steps are now taken will have significant consequences. If tariffs fall, the price of imported raw materials will decline commensurately, and so will finished goods pricing. There will be considerable inventory devaluation per GAAP standards, and 232 protected markets will feel the negative impact. Non-tariff products will likely benefit from lower prices on raw materials. In spite of a robust recovery outlook, these administration decisions will weigh heavily on decisions of steel producers and distributors. Brian Burr, president, American Wire Producers Association.
Dr. Kurt Eder
The global Covid-19 pandemic hit the export-oriented industry in Europe particularly hard in 2020. Acquisitions, foreign travel, customer visits, trade fair participation, business missions, etc., were impossible, and the uncertainty greatly curbed investment propensities. The now finally available vaccinations against Covid-19 were a real Christmas present. The majority of the Austrian equipment specialists and suppliers to the international wire and cable industry are now confident again that the effects of the pandemic, at the latest in the second half of 2021, will largely dissipate, and that there will again be a global catch-up demand and a considerable increase in demand will occur. Some trade policy uncertainties remain, from the U.S. and China to Britain after Brexit, but since man is supposed to be a “reasonable being,” we are optimistic— especially under the newly elected U.S. president—that in 2021 we can again focus on reliability, economic expansion, and good cooperation with our customers all over the world. Dr. Kurt G. Eder, president, AWCMA/VÖDKM.
My outlook is based on observations from economists and recognized research organizations that WCMA heard from this year as well as my own. You can’t generalize a market overview for the entire wire and cable industry, but it is safe to say that specific segments have been either helped or hurt depending on end-use requirements. Manufacturers of power or data infrastructure cables are smiling, but it’s gloomy times for those who serve oil and gas, commercial aerospace, commercial construction and some auto industry segments. Covid-19 concerns will continue into 2021, and consumer-driven businesses will have to work hard to survive. Yet the economy fundamentals, especially for manufacturing, for the most part will allow them to finish 2020 in a strong position. Outlooks for 2021 are more optimistic, and actually robust for some segments. Stock prices and copper prices are up, and unlike 2008, there is cash on the sidelines, so you can expect to see an influx of private equity money to our industry segments. Ed Fenton, executive director, Wire & Cable Manufacturers Alliance.
Tom Dobbin
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Brian Burr
Ed Fenton
There are some reasons to be optimistic about the outlook for aluminum wire and cable in 2021, despite ongoing Covid-19-driven uncertainty. Earlier this year, the Aluminum Association released its biennial industry jobs report which showed continued stability in jobs and economic impact for aluminum firms overall. Despite a 16% year-over-year demand decline for aluminum overall amid Covid, shipments of aluminum wire, rod and bar are only off about 1.4% for the year (through October 2020). We attribute this segment’s relative strength to the resilience of the power distribution sector, with a slight nod to renewables. Looking ahead, the aluminum wire industry has much to gain from potential infrastructure and green energy investments in the next administration and Congress. New building construction, transmission lines and new charging stations for electric vehicles would all benefit the industry. To learn more about aluminum wiring and its many applications, visit www.aluminum.org. Tom Dobbin, president & CEO, Aluminum Association. J A N U A R Y 2 0 2 1 W I R E J O U R N A L I N T E R N AT I O N A L
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