The impact of the US-Iran war on the international cable market: steel-cored aluminum stranded wire and mining cables face supply and demand restructuring

2026-03-09 19:50:55

On February 28, 2026, the United States and Israel launched airstrikes against Iranian military targets. Iran immediately counterattacked with missiles and announced the closure of the Strait of Hormuz. As the "choke point" for global energy transportation, the Strait of Hormuz handles approximately 30% of the world's seaborne oil trade and 20% of liquefied natural gas (LNG) transportation. The substantial risk of blocking this key passage is causing a chain reaction in the international cable market. This article focuses on two major categories: steel-cored aluminum cables and mining cables, providing an in-depth analysis of the market changes brought about by geopolitical conflicts.

1. Strait of Hormuz: The "lifeline" for upstream raw materials of cables To understand the impact of the US-Iran conflict on the cable market, we must first focus on the strategic importance of the Strait of Hormuz. It is the only sea route for major oil-producing countries in the Middle East, including Saudi Arabia, Iran, the United Arab Emirates, and Kuwait. If Iran were to take action to close the strait, it would lead to energy supply disruptions, soaring transportation costs, and supply chain disruptions - a series of chain reactions that would directly impact the upstream raw material market for cable manufacturing[ACSR]. 

For the cable industry, copper and aluminum are the two core raw materials. Copper accounts for 60%-80% of the cost of wire and cable, making it an essential imported input. Aluminum is also an important metal in the cable industry. The Gulf Cooperation Council countries are important global producers of aluminum - Alba in Bahrain and EGA in the United Arab Emirates provide nearly 9% of the world's primary aluminum. And the Strait of Hormuz is the only way for these aluminum products to be exported. 

II. Steel-cored aluminum strand: direct impact from aluminum supply crisis As the mainstay product for high-voltage transmission lines, steel-cored aluminum stranded conductors are highly sensitive to price fluctuations in aluminum raw materials. In this conflict, aluminum stands out as the industrial metal that benefits the most, yet it also faces the most direct threat to its supply. 

Supply side: The dual predicament of "raw materials cannot enter, and finished products cannot leave" Aluminum production in the Middle East has a fatal weakness: its dependence on imports for alumina and exports for electrolytic aluminum. If the Strait of Hormuz is blocked, it will lead to a dual dilemma of "raw materials cannot enter and finished products cannot leave," posing a direct threat to the stability of aluminum production in the region. 

According to research reports from CSC, the Middle East region (comprising six countries including Iran, the United Arab Emirates, and Saudi Arabia) boasts an electrolytic aluminum production capacity exceeding 7 million tons, with Iran alone possessing nearly 800,000 tons. Should this substantial production capacity come to a halt due to disruptions in shipping lanes, the global aluminum supply would confront a significant deficit. 

Inventory vulnerability amplifies risk What is even more concerning is that the apparent global inventory of electrolytic aluminum stands at only 1.175 million tons, equivalent to just 5.6 days of global consumption (as of February 24, 2026). This means that in the event of supply disruptions in the Middle East, the global market's resilience to shocks is extremely fragile, making it highly susceptible to significant price hikes. 

Fahd Chinoy, CEO of Pakistan Cable Company, recently stated that with the Strait of Hormuz being regarded as a "no-go zone" by many shipping companies, aluminum prices have deviated from their historical norms, recently surpassing $3,400 per ton, reaching their highest level in nearly four years, due to Alba's suspension of shipments. 

Conduction effect on steel-cored aluminum stranded wire In the production cost of steel-cored aluminum stranded conductors, aluminum accounts for over 70%. A significant increase in aluminum prices will directly drive up the ex-factory price of steel-cored aluminum stranded conductors. For countries that are advancing their power grid construction, this means a notable rise in the cost of transmission line construction. Especially for countries with high import dependency, the cost pressure will be even more pronounced. 

III. Mining Cables: The Dual Impact of Soaring Copper Prices and Supply Chain Disruption Mining cables are highly dependent on copper raw materials and typically require special properties such as wear resistance, flame retardancy, and resistance to mechanical damage. Their production process is complex and involves a long supply chain. The impact of this conflict on mining cables is manifested in multiple aspects: 

Copper price: driven by both macro sentiment and supply risks Compared to the logic of "substantial supply disruptions" in aluminum, copper is more influenced by the transmission of "macro sentiment". However, the escalation of conflicts is transforming this sentiment into tangible supply risks.

 According to data from the London Metal Exchange, copper prices have soared from around $10,000 per ton over the past six months to over $13,000 at the close on March 6th. Although international copper prices may eventually decline due to the pressures of the global economic downturn, the drastic fluctuations in the short term have posed significant challenges for cable manufacturers. 

The team at Pakistan Cable Company recently discovered that some raw material shipments may be delayed due to the war. In an industry that traditionally manages working capital through strict inventory control, this disruption has created an urgent strategic dilemma - "Should we start building up inventory? Will everyone rush to stock up on raw materials?" the company's CEO asked rhetorically. 

Special requirements for mining cables Mine cables are widely used in underground mining, transportation, ventilation, and other aspects, with extremely high requirements for safety and reliability. The rise in copper prices directly drives up the production costs of mine cables, while the uncertainty of the supply chain threatens the ability to deliver on time.

 The profit margin in the cable industry is typically between 2% and 4%, which is extremely slim. With the rise in metal prices and supply disruptions, the final cost of finished cables may increase significantly. For mining companies, this means increased cost pressure on equipment renewal and expansion plans, which may slow down project progress.

 IV. Regional market differentiation: Who is the winner? Who is the loser? Local cable companies in the Middle East: Production halt risks intensify The Middle East region boasts a relatively well-developed cable manufacturing industry chain, yet it heavily relies on bidirectional logistics for importing raw materials and exporting finished products. The blockade of the Strait of Hormuz poses a risk of production stagnation for cable companies in the region. Iranian local enterprises, in particular, will face even greater difficulties under the dual impact of sanctions and conflicts. 

South Asian cable enterprises: cost pressure and export opportunities coexist South Asian enterprises, represented by Pakistan Cable Company, are facing the pressure of rising prices of imported raw materials on the one hand, and actively seeking export opportunities on the other. The CEO of the company stated that during the foreign exchange crisis in Pakistan in 2022-2023, they leveraged the crisis to drive export growth, with export values increasing by approximately three times. This approach of seeking opportunities amidst crises is worth learning from. 

Chinese cable enterprises: supply chain advantages are prominent

As the world's largest producer of wire and cable, China boasts a complete industrial chain supporting capability. According to data from the General Administration of Customs, China's imports of polyethylene from Iran account for 9% of its total imports, and Iran's share of high-pressure polyethylene imports stands at 14%. Although the conflict may hinder the import of some raw materials, China's well-established domestic production capacity and diversified import channels can buffer the impact to a certain extent.

 More importantly, Chinese power grid equipment enterprises are accelerating their "going global" strategy by leveraging their advantage of a complete industrial chain. Financial reports point out that against the macro backdrop of the escalating conflict between the United States and Iran, the market is deeply reassessing the strategic value of energy security. The power grid equipment sector has been performing strongly recently, with Tongguang Cable hitting the 20% daily limit and several other stocks such as Huatong Cable also reaching their daily limit.

 V. Medium and Long-term Trends: Structural Restructuring of the Cable Market Supply chain restructuring: from "efficiency first" to "safety first" Experts from institutions such as Soochow Securities point out that if the conflict persists, it will accelerate the shift of global supply chains from "efficiency priority" to "security priority". This means that trade flows that are highly dependent on specific sources, like China's imports of LDPE from Iran, may face permanent adjustments. Finding alternative sources and developing domestic production capacity will become a long-term trend - a process that itself will increase costs and uncertainties.

 For cable companies, this means the need to re-examine the supply chain layout, consider strategies such as diversified procurement, regional production, and localized inventory, in order to enhance their ability to resist risks. 

Power grid investment: Geopolitical conflicts spur new demand The destruction of energy infrastructure by war has given rise to significant post-war reconstruction expectations. Historical experience has shown that repair projects after conflicts often require large-scale upgrades to power grids. Taking the attack on Saudi Aramco's oil refinery as an example, similar incidents are bound to prompt Gulf countries to re-examine and strengthen the protection capabilities and redundancy construction of their energy facilities. 

This "reconstruction" is not only confined to war-torn areas, but also encompasses the accelerated modernization of power grids in energy-importing regions such as Europe, aimed at reducing external dependence and enhancing energy autonomy. This implies that basic materials for power grid construction, such as steel-cored aluminum strands, will experience new demand growth. 

New energy transition: Long-term support for cable demand Despite the short-term impact of geopolitical conflicts, the general trend of global energy transformation remains unchanged. The CEO of Pakistan Cable Company pointed out that there are three demand drivers in the cable industry: grid investment and solarization, electric vehicle transformation, and data center construction. 

Solar energy projects: Due to high electricity prices driving consumers towards solar energy, this has become a significant driving force for the cable industry, as approximately 10% of the total value of any residential or industrial solar energy project now consists of solar-specific cables. 

Electric vehicles: advantages in the new era of "safety first", each electric vehicle requires four times as much copper as a traditional internal combustion engine vehicle. Data centers: Large-scale investments in data centers globally are creating a surge in demand for specialized cables. These long-term trends will not be altered by short-term geopolitical conflicts, but may instead accelerate due to the demand for energy autonomy. 

VI. Suggestions for Cable Enterprises 

1. Diversified supply chain layout Over-reliance on procurement strategies from a single region or source carries extremely high risks in the era of geopolitical conflicts. Cable companies should actively expand their raw material supply channels and consider establishing cooperative relationships with suppliers from multiple countries and regions to reduce concentration risk. 

2. Dynamic optimization of inventory strategy Finding a balance between the tradition of "tight inventories" and supply uncertainty. The CEO of Pakistan Cable Company's follow-up question - "Are we starting to build inventories? Will everyone rush to hoard raw materials?" - is precisely the strategic question that every enterprise needs to consider.

 3. High-end product structure Special cables and high-end cables have higher added value and stronger resilience to price fluctuations of raw materials. Mine cables are an important category of special cables. Enterprises can further upgrade in the direction of high temperature resistance, corrosion resistance, and intelligence to enhance product competitiveness. 

4. Market diversification and expansion Fully leverage China's industrial chain advantages and actively explore overseas markets. In particular, the demand for Chinese cable products continues to grow in countries along the Belt and Road and emerging markets. 

Conclusion 

The crisis in the Strait of Hormuz triggered by the war between the US and Iran is affecting the international cable market through multiple channels, including raw material supply chains, transportation costs, and market expectations. For steel-cored aluminum cables, the most pressing risk is the substantial disruption of aluminum supply; for mining cables, the soaring copper prices and uncertainty in the supply chain pose dual challenges. 

However, opportunities also lie within crises. The demand for power grid reconstruction, accelerated energy transformation, and regional restructuring of supply chains will all create new growth opportunities for the cable industry. The key lies in whether enterprises can keenly grasp the changing situation and reshape their competitive advantages in the new era of "safety first". 

While the profit margin in the cable industry is indeed slim, as the CEO of Pakistan Cable Company aptly stated, "We see opportunities amidst crises." Pioneering new paths amidst changes may well be the key to survival in the current international cable market.