3rd Quarter 2020
The number of machines delivered in Q3 declined by 7.7% from Q2 shipments while value of these delivered dropped by 7.2%, reflecting a modest shift toward higher-value equipment as well as shifts toward larger-scale units within the product lines. But these changes are generally insignificant. On a year-over-year basis the decline was just over one-third (units) and 30% (value). And from the peak of the last cycle the declines were 48% and 45%. Given the ongoing economic and mining industry turmoil brought on by the pandemic, it’s difficult to assert the industry has reached a cyclical ‘bottom’ but it does appear the contraction is softening over the past two quarters.
Underlying these overall figures are some very substantial variations by product, mineral and geographic sectors. Truck and dozer shipments were down double-digits Q/Q with truck deliveries off nearly 40% YoY. In sharp contrast, hydraulic excavators were up more than 40% from Q2 while wheel loaders were essentially flat. Excavator deliveries have been very volatile in 2020, declining by nearly half between Q1 and Q2, then recovering most of that loss in Q3. Similar shifts are evident in the geographic numbers. Substantial declines occurred in most regions: Africa -22% (measured in value), Latin America -17%, North America -19%, Russia/CIS -30%. Shipments to Australasian mines increased by a modest 5% while deliveries to Asian mines were up 24% and those to Europe/Middle East gained over 40%. But worthy of note, the latter two regions are substantially smaller in overall size than the others.
Changes to shipments by mineral shift dramatically quarter by quarter and Q3 was no exception. Despite generally unfavorable long-term prospects, coal remains the largest sector with over 20% of the value of all Q3 shipments. While this was essentially unchanged from Q2, it represents a 44% drop from Q3 2019. Gold mines recorded a 43% decline Q3/Q2 but were +26% YoY reflecting very strong pricing. Copper was up 9% but sharply lower YoY. In contrast, iron mining deliveries were down by one fourth Q3/Q2 but up modestly YoY. Shipments to oil sands mining (a substantially smaller and geographically more concentrated sector) have been extremely volatile but in general decline (-50% YoY) reflecting pandemic induced declines in oil demand and attendant oil pricing.