U.S. COPPER CLAD STEEL WIRE MARKET ANALYSIS

The rising import prices of copper and increasing labor costs are posing significant challenges for the growth of the U.S. copper clad steel wire market. Copper is the primary raw material used in manufacturing copper clad steel wire. According to the U.S. Geological Survey, the average market price of copper increased from USD6, 700 per tons in 2020 to over USD8, 000 per tons in 2022. This represents a price rise of nearly 20% over the last two years. Higher copper costs ultimately make copper clad steel wire more expensive to produce for domestic manufacturers.  At the same time, labor costs in the U.S. have also witnessed a steady uptick. Data from the U.S. Bureau of Labor Statistics indicates that the average hourly earnings of all employees increased from USD29.73 in 2020 to USD32.27 in 2022, marking an 8.4% rise. Manufacturing copper clad steel wire is a labor-intensive process that requires skilled workforce to carry out critical manufacturing operations such as stripping, cladding and drawing of wires. Higher wages have pushed up manufacturing overheads for companies. The combined impact of rising raw material and labor prices has negatively impacted the margins of domestic producers.

Opportunities: Growing demand from the construction industry

The construction industry in the United States has been experiencing significant growth over the past few years and this upward trajectory is expected to continue in the coming years as well. Various infrastructure development projects, increased spending on public construction works as well as strong housing market signals have pointed towards a prolonged demand boom from this sector.  Copper clad steel wire is extensively used in the construction industry for reinforcement in concrete structures. The non-corrosive and high strength properties of copper clad steel wire make it an ideal material for building bridges, buildings, roads etc. where durability and tensile strength are of prime importance. As per the U.S. Census Bureau, the total construction spending in 2021 stood at over 1.7 trillion dollars, a rise of over 4% compared to the previous year. Several large projects are ongoing or in the pipeline such as the renovations in public transportation systems, high speed railway projects, new power plants and data centers. The Biden administration has further committed huge investments for upgrading infrastructure over the next decade.