Growth in machinery sales predicted

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  • Earthmovers & Exacavators

Slow and steady single-digit growth is predicted for construction and mining globally, which should flow on to stronger machinery sales

 Growth In Machinery Sales Predicted

Mining equipment sales have been lacklustre globally over the last eight years. But with mineral prices staging a recovery, can mining now expect a surge in demand for mobile equipment?

"As commodity prices increase we do expect mining companies to invest more heavily and equipment sales to rise from their low levels," Off Highway Research managing director Chris Sleight says.

"We are not expecting the return of the super cycle. But most manufacturers would find it easier to manage five per cent increase than the 20 per cent of the boom years, thereby avoiding all the component and consumable shortages which we saw in the boom years of the 2000s."

"We research the international markets for surface mining equipment, and we haven’t seen a significant revival yet.

"We saw some early signs of improvement in 2017, but whatever happens with demand, it is difficult for the industry to rapidly ramp up production after a long period of very low sales."

It seems that excavators are seeing a period of increaded demand.

"In the last 18 months we have moved into a phase where supply is struggling to keep up with demand, particularly in the most popular sector, crawler excavators.

"After a long period of downsizing and cost efficiencies, the industry and parts of the supply chain are struggling to ramp up production capacity quickly."

 

Mini excavator

 

Sleight is cautiously confident that thinks will improve for mining equipment sales in the way that they have for construction equipment, but more modestly.

"The global rigid hauler market peaked around 2012 when global demand was about 5,500 units a year.

"When commodity prices collapsed this fell very steeply, to barely above 2,000 units in 2015, 2016 and 2017, which looked like the bottom of the cycle.

"It was a deep and prolonged low – but we think that we are now seeing a slow recovery forming."

"The mining equipment recovery is certainly lagging the strong rebound in equipment sales currently being enjoyed in general construction.

"We do expect a modest recovery, but mining equipment is durable and quite economical to rebuild, thereby extending its working life.

"Also, the large fleet that was supplied before the crash often still has low hours on, due to the lack of mine activity, so there is not quite the same requirement for fleet renewal now as in general construction."

While mining only makes up a small portion of the global mobile construction equipment market, machines used for mining applications tend to be larger, more profitable machines, and because they are production machines, are lucrative in the parts and servicing revenues, according to Sleight.

"For more specialist machines, such as rigid haulers, the mining market is crucial, as they are rarely seen outside of quarrying and mining applications."

 

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1982 Komatsu D65E-6 Dozer

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