It is expected that by 2020, the offshore wind power industry will be the most important terminal application market for submarine power cable demand. The reason why energy companies have increased their investment in submarine power cables and construction is to further improve the efficiency of transmission and ultimately ensure the supply of land power. At the same time, the world continues to invest in renewable energy, including tidal energy, wave energy and offshore wind power will continue to promote the market demand for growth.
      According to TECHNAVIO's latest research report on the submarine power cable market. From 2016 to 2020, the annual compound growth rate of global submarine power cable market demand is about 5.89%. Among them, the continuous fluctuation of raw material prices, the increase in demand for high-voltage DC cables and the increase in R&D investment will be three emerging trends that will promote the steady increase in global submarine power cable demand. Next we will briefly analyze these three points.
The first point of raw material price fluctuations: the main raw materials used to produce power cables are aluminum and copper. The cable itself is a light industry, so the impact of price fluctuations on the cable manufacturers is very straightforward. As of December 2015, the cost of raw materials accounted for about 85% of the total production cost of submarine power cables.
      Among them, the cost of copper and aluminum accounts for about 50% of the total production cost. Because of this, the price fluctuations of copper and aluminum and other necessary raw materials, coupled with fluctuations in fuel and energy cost prices, have a significant impact on cable manufacturers' cost of sales and revenue. To this end, cable manufacturers are also trying to reduce the impact of fluctuations in metal prices through price changes negotiated by finished products. In this report, it is also believed that by increasing the selling price of the finished cable products, the increase in gross profit margin can be achieved, and the risk of fluctuations in raw material price costs can be achieved, but the prerequisite is the market for finished power cable demand. Supply is in short supply.
      The second reason is that the sales of high-voltage DC cables are constantly increasing: high-voltage DC underground cables are a viable option for long-distance high-voltage power transmission. The European Commission has screened out 43 major energy projects to build cross-border infrastructure, hoping to achieve a single energy market and improve regional energy security. In these projects, a large amount of electricity needs to be transferred from one country in Europe to another. Therefore, it is expected that by 2020, the European market will also become the main power cable demand market for high-voltage DC cables. Beyond this, the characteristics of light weight, low loss and so on make high-voltage DC cables a more advantageous alternative to AC cables, especially in the submarine transmission market.
     The third reason is the increase in R&D investment: in this report, they believe that the increase in R&D investment is also one of the reasons for the steady growth of demand for the submarine power cable market in the future. The rapid growth of the offshore wind power market has also created more opportunities for research and development. Many alternative energy sources and resources also require different types of power cables to achieve stable power delivery. It is precisely because of this, cable manufacturers will continue to increase investment in new cable technology, early to achieve longer distance, lower loss of high-voltage power transmission work, to meet the current power cable demand market. Not only that, but because of the increasing competition for homogenization of products, cable manufacturers need to constantly increase the research and development of new products to ensure that their companies remain absolutely competitive.

      In this report, the future development trend of submarine power cables is also pointed out:
      (1) The traditional wet design of power cables will shift to dry insulation design, which is more conducive to the peripheral environmental conditions of the cable;
      (2) Low electrical stress will shift to high electrical stress;
      (3) Large diameter dimensions will be converted to small diameter dimensions;
      (4) The quality of the cable will become lighter;
      (5) Short-range delivery to long-distance destinations.
      This is the three main reasons pointed out in the report that will affect the demand for power cables and the future development of submarine power cables.