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Strong global demand for minerals and other commodities promises to fuel demand for mining equipment for years to come. This is positive news for domestic steel suppliers, not just because of the large amount of metal used to make each giant mining truck or shovel, but because much of this equipment continues to be produced in the United States. “Anything that has anything to do with commodities is doing well,” says Jim Hoffman, senior vice president of operations for Reliance Steel and Aluminum Co., Los Angeles. “It appears that with commodity prices where they are, and mining demand up throughout the world—especially in emerging markets like China, India and South America—the market for mining equipment will continue to be fairly strong for some time,” says Bill Jones, chairman of O’Neal Industries Inc., Birmingham, Ala. Jones and other steel suppliers note that production of the huge earthmoving machines consumes a lot of plate, as well as shapes, tubing, beams, and carbon and alloy bars. While some commodity prices have moderated in recent weeks, they are still high enough to warrant further investment in mining activity and equipment, says Eli Lustgarten, senior vice president of Longbow Securities, Cleveland. Globally, mining equipment is sold out for the year, he reports, with capital investments by mining companies forecast to grow 30 percent both this year and next. Currently, all of the major equipment manufacturers are operating close to full capacity and have growing backlogs that extend out into 2012. “Right now, mining companies are profitable. As long as they continue to have capital to spend, they will buy new equipment,” Yengst says. “This is a replacement type of business. Mining trucks and shovels, much like major appliances, wear out and need to be replaced periodically. I think we will continue to see healthy backlogs into 2013.” “Mining is a long cycle business. It takes five to 10 years to develop mines, so mining companies tend to take a very long view of the global economy,” says Sanders at Joy Global. “They aren’t concerned about quarterly fluctuations.” All eyes are on China and India to determine how long these good times will last. “China accounts for 40 percent or more of all commodity consumption. As China goes, so goes the mining industry,” notes Popovich at NMA. In general, equipment makers are being careful about adding too much new capacity, given the cyclical nature of the mining business, Yengst says. “They all realize there will be a time when customers either won’t need any more equipment or they won’t have the money to buy it.” One quick way for a company to expand its product offerings is to acquire a competitor. Longbow’s Lustgarten reports that merger and acquisition activity in the mining equipment sector has picked up in the last year or two. In February 2010, Milwaukee-based Bucyrus International Inc. acquired the mining equipment unit of Terex Corp., Westport, Conn. Nine months later, in November, Caterpillar announced its intention to acquire Bucyrus in an $8.6 billion deal that has already passed muster with regulators and is expected to close later this year. “The general consensus is that commodities pricing will remain strong and, as a result, demand for mining equipment should also remain strong,” says steelmaker John Ferriola, president and chief operating officer of Nucor Corp., Charlotte, N.C. Indeed, with other markets still lagging, the steel industry’s appreciation for mining runs deep. n stone crusher: http://www.crusher-machine.com/1.html vibrating feeder: http://www.hxjqchina.com/product-list_14.html Stone crushing plant: http://www.hxjqchina.com/n26.html
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