Why did the electric wire shortage occur? Volatile price fluctuations and unique business practices March 27th 18:41
``I thought, 'Are you kidding me? Is that even possible?''
says the manager of an electrical construction company that handles public works. Electric wires and cables that had arrived immediately after ordering suddenly stopped arriving, causing construction delays at many sites.
Electric wires and cables are used in electrical work in buildings and are essential to our lives. Why did we suddenly "run out"?
(Mobile Deployment Project Reporter Ayumi Yanagisawa/Kitakyushu Bureau Reporter Naoya Ito)
The reason for public construction delays is “lack of electric wires and cables”
Late February this year. At Toyama Prefecture's Tonami Technical High School, construction work was progressing at a rapid pace.
What was being carried out was construction work to install electric wires and cables to conduct electricity within the school building. It is said that they finally arrived in stock about a week ago.
Construction companies received information in November last year that orders would be suspended due to a shortage of electric wires and cables. I placed the order in a hurry, but the cable, which was expected to arrive in mid-January, was only delivered on February 14th.
As a result, some construction work was halted for about two weeks. There are also impacts such as the inability to test run air conditioning equipment because there is no electricity in the building.
In the end, the renovation work on the dilapidated school building ended on the 26th of this month, 11 days longer than originally planned.
Representative from an electrical construction company
: ``We were under the impression that the wires and cables would arrive as soon as we ordered them, but orders suddenly stopped, so we hurriedly negotiated with the wholesaler.We are relieved that the cables have finally arrived. Yes, it's still not stable. We're in a lot of trouble because we can't complete the construction as planned."
In Toyama Prefecture, two other prefectural schools have also been affected by delays in school building renovation work.
Because these two schools were unable to complete the construction within the construction period originally scheduled for late March, it was decided to extend the construction period by approximately two months.
Manager Nakaie
: ``I have never heard of construction delays due to a lack of electric wires.It is important to finish the current construction work first, but once it is finished, I would like to consider future measures.''
Shortage of electric wires has become serious since last fall
``The electrical work industry is panicking because electric wires are not available.''
These comments began to be received one after another on NHK's information service ``News Post'' around autumn last year.
[News Post] If you have any information or questions, please send them here.
Four major electric wire and cable manufacturers suspended new orders from August to December last year, saying they could not keep up with the rapid increase in orders from construction companies.
In addition to the ``high-voltage cables'' used to bring in electricity from outside the building, there was also a shortage of ``low-voltage cables'' to send electricity inside the building, which should have been in abundance.
It was such an ``abnormal situation'' that the representatives of the manufacturers and electrical construction companies we interviewed said, ``We have never
experienced anything like this before.''
After that, the four major manufacturers continued production at full capacity, and gradually resumed receiving new orders for both cables from February to March this year. The shortage is expected to be resolved.
However, in some cases, it can take several months from ordering to receiving the product, so it will likely be some time before the shortage at construction sites is resolved.
Three times this year! A series of thefts
As the shortage of electric wires and cables spreads, electrical construction companies are also suffering from unexpected circumstances.
In fact, there are a number of cases where electric wires and cables are stolen from construction sites.
An electrical construction company in Misato City, Saitama Prefecture has been the victim of theft three times this year. The total damage amount is approximately 1 million yen.
This photo shows the scene where a "low voltage cable" was stolen in early February. The red circle mark is where someone cut it.
The cable, which was installed at a company office under construction, was about 80 meters long.
The company believes the items may have been stolen for resale, as the price of copper used in wires and cables remains high.
Even if the installation work for electric wires and cables is completed, you may not be able to lock the door until the entire building work is completed. For this reason, we believe that the office was broken into and stolen.
Now that there is a shortage, it is difficult to get new wires and cables.
Other construction companies that have been affected by the theft have said that there are cases where construction work at schools, stores, etc. has been delayed.
2 million yen to strengthen measures
This electrical construction company has strengthened its anti-theft measures.
First, security guards are stationed at the construction site at night when there are no workers. In addition, we have rented two new containers. This is for storing electric wires and cables under lock and key. When I use it for construction work, I unlock it and transport it to the site.
The container is located on the company's premises and is also equipped with surveillance cameras and infrared sensors.
The cost for these measures was over 2 million yen.
President Takizawa
: ``This is the first time that we have experienced such a shortage of electric wires and cables, so I hope things get back to normal as soon as possible.There have been a number of cases of theft, and we are incurring costs that we shouldn't have to spend in the first place. There are many companies that are victims of theft, and I feel that society as a whole needs to consider countermeasures."
[Factor 1 of shortage] The balance between demand and supply...
So why was there a shortage of electric wires and cables?
The Ministry of Economy, Trade and Industry conducted interviews with major manufacturers and industry organizations. Although a clear cause has not been confirmed, he cited possible contributing factors.
Factors contributing to the shortage
▽ Demand has increased as construction work that had been delayed due to the coronavirus pandemic has started one after another
▽ Concerns about a shortage of electric wires and cables have spread, leading to cases where construction companies and others have ordered more than actual demand. Isn't there?
A combination of these factors led to a rapid increase in orders. It is believed that manufacturers were unable to keep up with production, causing the shortage.
[Cause of shortage 2] Discrepancy between demand forecast and order amount
On the other hand, major manufacturer Sumiden HST Cable explains that there are other reasons as well.
One of the reasons for the shortage is thought to be a discrepancy between the manufacturer's demand forecast for electric wires and cables and the actual amount ordered.
From June to July last year, this manufacturer continued to receive fewer orders from electrical construction companies than usual.
Furthermore, in August, the price of copper, which is used as a material for electric wires, rose sharply, so we took steps to reduce production to avoid excess inventory.
Under these circumstances, orders for electric wires and cables have increased since autumn. Although they took steps to increase production, it took a certain amount of time to reach full capacity.
Circumstances that make it difficult to keep inventory
The reason behind this response is that it is difficult to keep large amounts of inventory, which is unique to electric wires and cables. What does that mean?
According to manufacturers and industry groups, the core of electric wires and cables is made from copper, which is the main raw material, but the price of copper is subject to large fluctuations, and due to the continuing depreciation of the yen, the price of copper is high. It is said that it has stopped.
In a ``business custom'' unique to this industry, the price at which manufacturers sell electric wires and cables is linked to the price of copper at the time of ordering, rather than the price of copper at the time of purchase.
In other words, if the price of copper at the time of purchase is high and the price of copper is low at the time of ordering, there is a risk of large losses due to excess inventory.
President Okada
: ``Copper prices have been fluctuating quite wildly.The fluctuations this year have been relatively small, but there is still a difference of about 15% between high and low prices during the year, and last year there was a difference of more than 30%. The reality is that if the copper price were lower at the time of sale than at the time of purchase, we as a manufacturer would incur huge losses, and the losses would be so great that the company would be unable to survive.''
The Ministry of Economy, Trade and Industry, which has jurisdiction over electric wire and cable manufacturers, points out the following.
Ministry of Economy, Trade and Industry, Metals Division
: ``Copper is bought and sold by investors around the world, and copper prices are affected by buying and selling for speculative purposes.Also, since copper is only produced in a few countries, Supply is affected by political and economic conditions, the occurrence of natural disasters, etc.For this reason, the price of copper can rise or fall suddenly and is difficult to predict.In addition, the business practices of the electric wire industry I think this may be one of the reasons for the current shortage of electric wires."
Effects of “instability”
Experts say that situations like the current shortage of electric wires and cables are likely to occur in the construction industry in the future, and point out the need for countermeasures.
Professor Mihara
: ``The construction industry is a one-piece production system in which customers order the thickness, length, and quantity that suits the site according to their requests, and it is not mass production of a small number of products.For this reason, when construction work is concentrated, , the balance between supply and demand is disrupted and materials become difficult to obtain.If
the yen depreciates and the prices of imported resources rise, this balance becomes even more likely to collapse.The construction industry has been stable until now. There was a supply, but recently, problems have suddenly arisen such as iron not being available, wood not being available, and electrical wires not being available.How should we deal with the unstable supply? I think we are at the point where we have to think about whether it's okay."
Mobile Deployment Project Reporter
Ayumi Yanagisawa Joined the agency
in 2008 After working in
the Akita Bureau, Ishinomaki News Room, Cairo Branch, etc., she is currently with the agency.
Kitakyushu Broadcasting Station reporter
Naoya Ito Joined
the station in 2017 After working at
the Yamaguchi station, he currently belongs to the station