Dr Maurizio Bragagni OBE, Chairman and CEO of Tratos Ltd, will be speaking at the forthcoming CRU Wire & Cable Conference in London on the Energy Wire & Cable Leadership panel alongside other executives from wire and cable producers. They will discuss their views on the market and how their companies are preparing to find success in uncertain markets.
How has the pandemic affected wire and cable producers, and has this initiated the need for a green transition?
The Covid-19 pandemic highlighted how difficult it is in a globalised world to suppress the spread of a pandemic and spotted the weakness of existing supply chains. At the same time, it also created favourable premises for an economic reset, with a general and global consensus for a green recovery.
At Tratos Ltd, we say sustainable development is not the way but the only option for our business to survive. The international community must embrace sustainable development to achieve global economic recovery and sustain the future’s challenges.
Unless we act boldly on reforming the carbon tax, we are risking undoing the temporary reduction of GHG emissions and missing the achievement of the sustainable development goals.
At COP26, over 130 countries around the world have committed to a goal of carbon neutrality or net-zero carbon emissions, and many more have committed to significant reductions in their energy intensity.
Scientific based evidence tells us we need to halve global carbon emissions by 2030 and reach net-zero emissions by 2050. But achieving these goals requires an effort unlike any that humanity has undertaken before.
Reforming the carbon tax is paramount to achieving sustainable development and transforming our traditional economy into a circular one. The knowledge and technology are already there.
What lingering effects of the pandemic are disrupting trade, and how are the impacts of the war on Ukraine changing global wire and cable markets?
The reaction in trade in 2020 was consistent with the escalating global COVID-19 pandemic and steps taken by individual countries/territories in controlling or mitigating it. After a fragile recovery from the pandemic in 2021, the world economy in 2022 is facing market conditions of a “perfect storm”.
Starting from August 2020, raw materials used to manufacture cables have experienced a steep rise after major countries started reopening their economies post-Covid19. Copper rates dipped down in 2019 due to the sharp decrease in demand caused by global Covid-19 restrictions, but we saw a global trend of price increases after that initial period. Copper was traded for $4670 per ton in March 2020, while on 7 March 2022, its price went up to $10730 per ton.
The cable industry is heavily affected by the actions of governments and businesses around the world. The impact of COVID-19 includes a shortage of subcontractors and materials, supply chain disruptions, and the termination of contracts to control expenses.
The war in Ukraine joins the already crowded timeline of 21st-century disruptions, with disparate origins and complex consequences.
Geopolitical, market and financial volatility can generate unintended and unpredictable consequences. Russia’s invasion of Ukraine and the international community’s response provide a dramatic illustration of how combustible that combination can be.
Cable making industry, like many other businesses, must operate under conditions of fast price increases of commodities and services. As a direct result of the above, the cost of producing cables has increased significantly, so they are forced to pass part or all of the additional cost to the consumers.
Businesses around the globe continue to grapple with inflation brought on by the Covid-19 pandemic, as well as commodity price increases brought on by disruptions to the supply chain. Amidst this ongoing volatility are the new consequences arising from the Russia-Ukraine crisis that could leave the world facing extended reductions to energy supply, severe sanctions that will likely impact food security as well as rare metal supplies needed to sustain production of key technologies.
How might a recalibration of energy costs affect energy network investment?
The role of Russian oil and natural gas globally brings into focus the importance of access to energy. While the acceleration of renewable energy can solve part of the puzzle, gas will remain an important source, and nuclear and coal may become larger components of the fuel mix to secure supply, particularly to replace potential shortages of gas. The implications for achieving publicly committed net-zero emissions are not yet clear.
The current increase in energy prices would be challenging for low-income consumers, who spend a greater portion of their income on energy and related services, like transportation. Phasing out coal will require governments where fossil fuel subsidies prop up domestic energy production to deal with the job losses and economic upheaval that could result from a recalibration of energy prices.
Global energy consumption will increase 50% by mid-century, mostly to meet the needs of developing nations. The world needs not just low-carbon energy but more energy overall. Renewable energy might be a solution, but they are not yet accessible to all, and it is difficult to phase out fossil fuels and satisfy growing energy demand at the same time.
The first step to a decarbonised economy is to decarbonise the electricity sector and electrify as many energy uses as possible. The costs of renewable electricity generation have plummeted in recent years, making it more affordable in the developing world, where demand is growing.
CRU’s Wire & Cable Conference will be held as a live in-person event once again on 25-27 July 2022, London. This strategic annual meeting for the world’s wire and cable supply chain will be held in the UK for the first time and will bring together leading cable makers and key industry stakeholders for vital face-to-face discussions after two years of virtual events.
The conference aims to address some of the key challenges and opportunities the wire and cable industry faces over the coming years as we recover from the recent disruptions and transition to a greener and more connected world.
To view the full agenda and speaker line-up, please visit www.wireandcableconference.com.
Read more about the CRU Wire & Cable Conference here
