The Parker Bay Mining Company recently issued its second quarter updated surface mining equipment index. The results are another illustration of just how tough life is for for OEMs like Joy, Caterpillar, Komatsu, Liebherr, Atlas Copco and others. It appears that miners are managing to delay capex indefinitely as they get used to lower volumes, keep their equipment running for longer and find replacement parts and equipment in the secondhand market.
SURFACE MINING EQUIPMENT INDEX
2nd Quarter 2016:
Whether compared to previous reports sequentially (Q2 vs. Q1 2016), year-over-year (Q2 2016 vs. Q2 2015) or vs. the peak levels that were obtained in 2012, the latest reported deliveries are dismal. Annualizing the latest numbers would appear to result in 2016 shipments equal to less than one quarter’s shipments during 2012. And it ranks among the worst quarters in the past 20 years. There are a number of mining industry measures that appear to indicate an end to the industry-wide contraction, but these are certainly not yet reflected in equipment shipments tracked by Parker Bay.
Explanation of how the Index is Developed The PBCo Mining Equipment Index is a measure of the quarterly evolution of surface mining equipment shipments worldwide. It relies on data from Parker Bay’s Mobile Mining Equipment Database and encompasses the same product range covered by the Database*. The index utilizes the value of equipment as opposed to number of units such that one $10mm excavator has the same weight as five $2mm trucks. Values are not based on the price of each unit as sold but instead an approximate value assigned to machines by size class and product expressed in constant $’s (updated annually). As such, the index does not reflect changes in equipment pricing but rather the overall sales volume. The base for the index is Q1 2007=100. Quarterly figures are not seasonally adjusted. *All products are included except draglines whose low volume, high $ value, long lead time sales can cause fluctuations that don’t reflect the quarterly changes in the market.
Silas Berry – AsiaConsult – asiaconsult.org