Fibre optic cable production in Japan during July 2007 was particularly high, after three relatively weak months, and the prospects for a stronger H2 07 are promising. Japanese cable manufacturers are forecasting that demand will improve from September / October onwards, though overall FY2007 demand is expected to be in the region of FY2006 levels. So far in FY2007, municipality and power company investment in fibre optic cable networks has been weak, but NTT's FTTH / FTTP projects have continued to underpin Japanese demand, even though FY2007 has been fairly quiet compared to previous years. NTT's procurement levels are lower and there are growing concerns that NTT has altered its FTTP deployment strategy. Japanese cable manufacturers are currently not too worried over the activities of their Chinese counterparts, but there are concerns that their Chinese rivals are putting downward pressure on prices in export markets. In H2 07 Korean demand for fibre optic cable is likely to grow slightly compared to H2 06. Demand is currently being supported by investment in FTTH systems, and the majority of Korean fibre optic cable manufacturers are reporting healthy orders. But, despite the y-o-y improvement in demand, shipments in H2 07 are expected to be slightly lower than H1 07. Customers continue to exert downward pressure on prices, a trend that is expected to continue, as competition within the domestic market remains healthy. The deployment of FTTH systems is likely to continue into 2008. As a result, Korean cable manufacturers are currently forecasting that 2008 shipments will be similar to this year.
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