Global demand for mining machinery expected to rise

By |  January 17, 2014

The worldwide demand for mining machinery is expected to expand 8.6 percent per year through 2017 to $135 billion despite some sales weakness in the short term, a new study from industry market research firm The Freedonia Group Inc. shows.

“Gains will be spurred by voracious demand for mined materials in China, India, and other developing nations as industrial output increases,” says Freedonia Group analyst Matt Raskind.

The World Mining Equipment study reveals that rapid gains in mining equipment demand will occur in large developing markets such as Brazil and India, with China being the largest purchaser.

Although metals account for a smaller share of mine output than minerals and coal in volume terms, machinery used in metals mining represents the largest segment of the global market, according to Freedonia Group. This is because the large amount of ore that typically must be removed per metric ton of primary metal product output.

The demand for metals mining equipment will rise at the most rapid pace through 2017, stimulated by steel and aluminum production, according to the study. An expansion in construction spending and agricultural output as the global population continues to increase will boost consumption of construction aggregates and fertilizer minerals such as phosphate rock, as well as sales of related equipment.

“The greatest sales growth through 2017 will occur in the large Asia/Pacific region, fueled by substantial investments in new mine production capacity in several nations,” Raskind says.

The study also forecasts strong gains in South America, as mining companies look to develop the region’s sizable deposits of bauxite, copper and iron ore. The dissipation of copper oversupply issues that existed in 2012 and 2013 will allow prices to recover and boost associated mining equipment demand in areas rich in copper, such as Chile and Peru. The Africa/Mideast region will post the next fastest advances, followed by Eastern and Western Europe and North America.

In developed areas, a recovery in construction spending and manufacturing output will boost demand for nearly all types of mined materials, the study shows, although an increased emphasis on environmentally friendly sources of electricity will dampen thermal coal output.


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