4th Quarter 2020
The total number of machines delivered during Q4 2020 increased by 35% while the value of these machines was 26% higher than Q3. This is a substantial break from the contraction that began in Q1 2019 and which brought equipment markets down more than 40% over the seven quarters ending with Q3 2020. Parker Bay’s Mining Equipment Index (Q1 2007 = 100) peaked during the last expansion cycle at 92.7, then declined to 50.7. This index increased to 63.7 indicating the global market may have experienced an inflection point with sustained and substantial growth possible in 2021 and beyond. It’s an understatement to suggest there may be ‘headwinds’ as the global economy and mineral markets continue to deal with the pandemic and it’s impact on every facet of life. But a recovery in mining equipment markets does appear to be underway.
Manufacturers produced and delivered (761) machines during Q4, up from just (562) in Q3. This brought the annual total to just over 2,600; nearly one-third below the 2019 total. The value of Q4 shipments totaled US$1.4 billion vs US$1.1 billion for Q3. For the year, shipments barely topped US$5 billion, a 25% decline over 2019. And for reference, during the peak of the SuperCycle that ended in 2012, annual shipments topped US$14 billion.
Overall, it appears markets are recovering but it should be noted that this is a single quarterly gain, albeit a strong one. Should global economies continue to recover despite the adverse constraints imposed by the virus pandemic, the mining sector is expected to improve through 2021 and beyond. And along with it, mining equipment markets are expected to show significant gains. How significant is an open question.