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The temperature marking on a cable is highest temperature that the insulation may be exposed to in operation. It does not imply that the wire is suitable for operation at that temperature. What is does imply is that when cable heating due to current flow is taken into account with the applicable ambient temperature, there is a thermal limit that must taken into account.

When any wire carries current, it heats up a little. If the current density in the wire is very high, the wire gets hotter. At some combination of ambient and current-induced temperature, the insulation may sag, or it's electrical characteristics might change.

Say for example, that a wire is rated at 75C/170F and the ambient temperature is tropical (i.e. 40C/104F). In this case, the maximum allowed temperature rise in operation is 75C-40C=35C/167F-104F=63F.

Sometimes, high-temp cable is needed to survive operation in a cook-top or oven. Even some household light fittings get very hot in operation, such as halogen down-lights. Hence why they often have fibre-insulated wires (rated at 250C) running out to a connector. It is not uncommon for the bases of these lamps to reach 120C/248F on a Summer's day in the average ceiling.

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