The research study covers the present scenario and growth prospects of the global surface mining equipment market for 2017-2021. Surface mining equipment is used for surface mining activities, such as strip mining, mountaintop mining, and open-pit mining.
In 2012-2015, the global surface mining equipment market witnessed a slow growth. However, in the wake of crude oil prices stabilization in the first quarter of 2016, the market started to witness a positive trend. According to the World Bank, crude oil prices are expected to return to the pre-2012 levels by 2022. This is anticipated to drive the economy of countries in EMEA, increasing the inflow of cash into countries that are dependent on crude oil as their major source of income.
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Technavio analysts highlight the following three factors that are contributing to the growth of the global surface mining equipment market:
- Rise in demand for housing projects globally
- High demand for precious metals
- Increase in industrial commodity prices
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Rise in demand for housing projects globally
The housing market accounts for a major share of the global construction market. Increasing economic growth, purchasing power, consumer confidence, and urban population will exponentially increase the demand for residential complexes and projects in the forecast period. This demand will further be driven by decreasing unemployment rates and interest rates on loans.
Likhitha Bandla, a lead construction research analyst at Technavio, says, “The growth in population levels coupled with the high purchasing power of individuals will increase the requirement of building new houses. Strong economic conditions are also expected to drive the housing industry. Stable economic conditions attract investments in various industries from government and private corporations. These investments in various industries create new jobs, resulting in the decrease of unemployment rate.”
High demand for precious metals
The demand for precious metals, such as gold, platinum, and diamond, is expected to increase over the forecast period. With the expected stabilization in crude oil prices by 2022, the global economy is anticipated to remain strong. This will increase the employment rate across various countries, subsequently increasing the level of disposable incomes. The rise in disposable incomes is anticipated to increase the demand for gold and silver, especially among the growing middle-class urban population.
“Precious metals, such as gold, silver, and platinum, have prime importance in other industries because of their properties, such as low reactivity, high corrosion resistance, and good electrical conductivity. These precious metals have significant demand across various sectors, such as glassware, electronics, computer hardware, medical supplies, dentistry equipment, and others,” adds Likhitha.
Increase in industrial commodity prices
Industrial commodity prices are expected to increase over the forecast period. According to the World Bank reports, crude oil prices are forecast to reach above the USD 60 mark in 2018. However, rising oil prices coupled with the backing of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC states will allow crude oil prices to stabilize gradually.
Increased prices for commodities reflect a high demand. The increased demand for minerals is expected to increase mining activities related to mineral ores. The increased demand for energy will lead to the demand for coal, which will subsequently increase coal mining activities. This is anticipated to drive the global surface mining equipment market over the forecast period.
- Atlas Copco
- LARSEN & TOUBRO
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