1st Quarter 2019:
First quarter 2019 mining equipment deliveries indicate a marked slowing in the volume of shipments and a 5% decline in the value (the latter being our rough estimate based on approximate prices by product/size-class). In total, unit deliveries were up by just five machines vs. Q4 2018 (+0.4%). At the same time, Q1 shipments were more than 10% higher than Q1 2018. And it should be remembered that further reporting and refinement of these shipments frequently results in minor upward revision (+1% to +5%). But even if such adjustments materialize, the Q1 will represent a decided leveling off of the growth the industry has experienced since mid-2016. Whether this is the beginning of a sustained contraction or just a ‘pause’ in the current contraction will depend on both internal mining market dynamics as well as global economic and political developments.
As is usually the case, this overall change in shipments masks more significant shifts by product, geography and mineral. Mining truck shipments, which account for the lion’s share of the total, increased by just five machines, but this total was 5% lower than Q1 2018. Hydraulic shovel/excavator delivers decline by 26%. While the number of units in this product category is small relative to mining trucks, average value/price of these machines is much higher. And the accounts for almost the entire decline in the industry’s total shipments value for Q1. Crawler and wheel dozers shipments continue to increase sharply: +14% vs. Q1 and +88% vs. Q1 2018. While difficult to measure, we believe this growth is due in large part to the much lower availability of ‘late model’ dozers in the used equipment markets. Other product line shipments were relatively unchanged.
Geographically, deliveries to mines and contractors in Russia/CIS and Australasia maintained the strong positions they established in 2018 but shipments to Australasia decline both absolutely and as a share of the global total while shipments to Russia/CIS increase. North American mines accounted for a 14% share of Q1 vs. just 10% for all of 2018. Latin American and African deliveries declined while shipments to Asian mines increased.
With respect to shipments by mineral market, coal continued as the primary sector accounting for more than 50% of shipments. Copper and iron mines maintained their relative shares but shipments to gold mines declined substantially. The latter may reflect major gold miners’ focus several major mergers and, if so, major capex commitments for these machines may resume in the year ahead as management assesses their new asset bases post-merger.