Surface Mining Equipment Index

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.

Globally, a total of 1,221 units were delivered in Q4 2018.  This represents only a 1% increase over the revised Q3 total but more than 30% vs. Q4 2017.  However, the value of Q4 shipments increased by a more substantial 5.6% over Q3 as miners shifted some capex to larger-scale equipment, something that has lagged during the recovery/expansion to date.

It should also be noted that on average, quarterly reports have been revised upward by ~5% recently.  For example, total 2017 shipments were originally reported at 3,285 but they now total 3,399.   But even if Q4 2018 figures are revised upward, it appears evident that growth in equipment demand and subsequent shipments has been slowing now for three quarters.  This may not signal a downturn and there are factors that could drive demand significantly higher.  But optimism for 2019 should be tempered by other factors including projections of slowing global economic growth and the potential impact on mineral demand from international trade disputes.

3rd Quarter 2018:

Total Q3 mining equipment unit shipments decreased by about 1% vs. Q2.  But significant changes in the product mix toward larger, higher-value machines resulted in a four percent gain in the value of these shipments to more than US$1.8 billion.  Changes from quarter to quarter often reflect short-term factors and may not persist going forward.  Looking back over a longer period – Q3 2018 vs 2017 – the gains are far more substantial: +29% in units and +22% in value.

The first noteworthy difference in Q3 data is in the product mix: excavating and loading equipment, deliveries of which have lagged those of the trucks they are matched with during the recovery and expansion cycle, increase by 21% while trucks increased by just 7%.  In sharp contrast, crawler and wheel dozers declined by 28% after nearly doubling across the previous three reporting periods.  Hence the decrease in volume but increase in overall value.

Geographically, the very rapid growth in shipments to mines in Russia/CIS was sharply reversed in Q3 with total deliveries down 29% and falling below year-ago levels.  Nevertheless, shipments to Russian miners remained second only to Indonesia among national markets.  Indonesia continued the surprisingly strong gains in shipments propelled by continuing growth in coal markets and the contractors that support this mining sector.  Australia also contributed to the Q3 growth in Australasia with the region accounting 40% of the global value of these products.  Significant (though lesser) gains were recorded by North and Latin American mines.   Among the smaller mining regions, Asia and Europe, Middle East markets gained while deliveries to African mines declined.  Given the smaller size of these regions, quarter-to-quarter changes may not reflect longer-term trends.

Changes in the mineral distribution continued the trend away from coal, but coal mines collectively remained the largest buyers during Q3 with Indonesian and Russian mines accounting for over 70% of shipments to coal mining.   Among the other major mineral markets, deliveries to copper and iron mines continued to increase and represented a combined 32% of the value of Q3 shipments vs. just 26% during Q2. These deliveries were dominated by Latin American copper mines whilst iron mining shipments were split more evenly among mines in Australia, Brazil and to a lesser degree North America and Russia/CIS.  Shipments to oil sands increased while deliveries to gold mines declined.  All these mineral market shares should be considered preliminary as a significant number of machines have not been identified by mineral (as yet).

Parker Bay considers this slowing of the current expansion cycle a ‘pause’ rather than foreshadowing a downturn.   The gains recorded among larger miners reflect increasing capex both for sustaining existing production and some initial increases to that existing capacity.

This latest report marks two full years of growth since markets bottomed out in Q2 2016. Since then, deliveries have tripled yet remain well below the peak level achieved in 2012. Compared to Q1 2018, unit shipments are up 7% and 33% year-over-year. The value of shipments is estimated to have been virtually unchanged over the past three months. The divergence of units and value stems largely from the product mix with most Q2 increases recorded for smaller dozers, drills and graders. In contrast, truck deliveries (which account for the majority of units and value shipped) increases by less than 1%. Hydraulic shovels/excavators increased by 27%; crawler and wheel dozers = 37%, motor graders = 42%; drills = 83%. Wheel loaders and electric/rope shovels declined and continue to lag behind the other product lines during the current expansion cycle.

The distribution by mineral sectors shifted, to a degree, away from coal, gold and oil sands and toward copper, iron and other metals. However, the gains in the latter were relatively modest and do not yet reflect major investments in new or expanding capacity among these very large-scale operations. Geographically the largest gains were recorded by mines in Africa (+53%) and Latin America (+31%), but mines in Australasia and Russia/CIS continue as the largest destinations for new equipment; this despite quarterly increases of just 6% respectively. North American shipments declined by over 30%. While some of these changes may reflect secular trends (e.g., contraction of North American coal), others may simply result from short-term timing of individual mines’ requirements.

The expansion that began in the second half of 2016 continued in Q1 2018 and for the first time in nearly five years, quarterly deliveries topped 1,000 units. This represents a 15% increase over Q4 2017. But using a value-weight index, the growth was a more modest 10% vs. Q4. When combined with the gains recorded last year, the value of machines shipped in Q1 totaled nearly USD1.8 billion vs. USD1.2 billion in Q1 2017. By virtually any measure, the gains are significant and indicative of a substantial and sustained expansion cycle. Within these totals, there are significant variations. For example, mining truck shipments have increased by almost 50% over the past year; crawler and wheel dozers by just 25%. Shipments to many of the largest mines in the largest mining regions (North and Latin America, Australia) have lagged behind newer/developing sectors (Africa, Asia, Russia/CIS). Shipments to major new “greenfield” projects are rare. Mining contractors have taken delivery of a disproportionately higher share of all shipments in Q1: 25% vs. 20% of the installed population. As with any statistical series, it may be difficult assessing these changes, and judging whether they represent cyclical aberrations or more significant secular shifts in equipment markets.

The results for Q4 are quite good and continue the recovery and expansion that began in the second half of 2016. Across all products, Q4 shipments, measured by units delivered, increased by 7% vs. Q3 and 11% weighted by value. The latter reflects the relatively stronger deliveries of ‘higher-ticket’ items – larger mining trucks, electric and hydraulic shovels – versus lower capital cost products like dozers and wheel loaders. A number of trends noted in previous shipment reports continued in Q4. Truck shipments continued strong while other products either grew at slower rates or even declined from Q3 levels. Deliveries of hydraulic shovels/excavators, wheel loaders and dozers were all down Q4/Q3. But only wheel loader shipments recorded a decline (<1%) for the full year 2017 vs 2016. Excavators and dozers were both up 27% vs. 2016. Shipments of very high-price but very low-volume electric/rope shovels were sharply higher for both Q4/Q3 and 2017/2016.Regionally, mines in Australasia and Russia/CIS continued to lead the expansion cycle although the gains in Russia/CIS slowed sharply in Q4. African and Latin American mines took on substantially larger numbers in both Q4 and full-year. But North America and Europe/Middle East lagged over all markets with North American mines taking delivery of fewer machines in Q4 vs. Q3 and very modest gains year-over-year. Coal mines continued their surprisingly strong demand and accounted for 47% of all units shipped worldwide. But this is down from the 61% share recorded in Q4 2016 and Q1 2017. The most dramatic shift in Q4 shipments was the 30% share accounted for by gold mines. In contrast, deliveries to copper, iron and oil sands all remained below historical levels and shares – just a 20% cumulative share of total shipments in Q4.These gains in shipments are accompanied by the first substantive increase since 2013 for the active machine population which increased over the past year by 4.5% to nearly 74,000 machines in operation. During January alone, the Database updates include more than 400 machines put back into service while fewer than 100 were identified as newly decommissioned. A general assessment of mining and equipment markets leads Parker Bay to conclude that these markets will continue to record strong gains in 2018. Even after the 605+ increase in machine shipments last year, the overall market is at least 50% below the peak levels of 2012. With favorable mineral pricing and demand expected to continue, miners are likely to continue stepping up capex plans with machine shipments to follow.

Third quarter deliveries continued the trend that started in the third quarter of 2016 and reinforce the many other indications of a sustained and growing recovery and expansion of mining and equipment markets worldwide. Although not every market segment expanded during Q3, the overall market increased by approximately 11% vs. the very strong gains recorded during Q2. And when comparing these latest shipments to those of a year ago, the gain is an impressive 83% (number of units). Mining trucks, by far the largest product sector, increase by nearly 20%, surpassing 600 unit deliveries for first time since Q2 2013. The gains recorded by manufacturers of excavators/loaders were even stronger during Q3 (+43%) after lagging behind truck shipments during earlier stages of this expansion phase. But in contrast, crawler and wheel dozer shipments lagged these primary production products with shipments contracting by 17% vs. Q2 and up just 6% year-over-year. This latest result may be anomalous and could represent a need for miners to focus their still restrained capex on those products essential to maintaining and growing mineral output. We would expect a recovery and acceleration in dozer deliveries in the near future.

Open pit mining equipment deliveries increased 21% in units (24% increase in value of these deliveries) as compared to Q1 2017, and a very impressive 92% year-over-year increase in units shipped during Q2 2016 (which represented the bottom of the last contraction cycle). Having now increased for four consecutive quarters and by a substantial amount, it seems appropriate to consider the mining equipment markets in a sustained expansion phase. Related measures of mining industry activity (mineral production and prices, mining company revenues and profits, capex, acquisitions of major mine assets) all point toward these results continuing for the balance of 2017 and beyond. As always there are exceptions and the potential for reversals.

Growth in manufacturers’ shipments to end-users slowed in Q1 following very substantial gains in Q3 and Q4 2016. Most of these increases were achieved in smaller products and units (dozers, graders, drills), while the numbers of mining trucks, hydraulic shovels/excavators, and wheel loaders all declined modestly. While that latter might be viewed negatively, it is should be noted that the declines were small and relative to Q4 only. For example, after 45% between Q3 and Q4, the number of trucks shipped declined by less than 4% in Q4. And Q1 truck shipments were 25% higher than the average quarterly deliveries during 2016. As we’ve cautioned before, there is a risk in reading too much into changes from one calendar quarter to the next. The recovery on mining equipment demand/shipments appears to be continuing but is not so strong as to consistently produce the gains recorded at the end of last year.

Fourth quarter surge in shipments of large mining equipment may signal sustainable market recovery. Having reached what appears to have been ‘rock bottom’ of the severe, four-year contraction in large equipment deliveries, shipments of large mobile surface mining machines shipped during the last calendar quarter of 2016 (as measured by Parker Bay’s Mobile Mining Equipment Index) increased by almost one-third (units) with aggregate value increasing by 28% vs. Q3. These gains came on top of significant improvements during the July-September quarter. Coupled with a myriad of other markers of mining industry improvement, this may well signal the beginning of a sustainable growth cycle.

Mining Equipment deliveries increased 13% over Q2 which was also revised upward by 3% owing to additional units added. As is usually the case, the gains were quite uneven by product, size, region and mineral. In particular shipments of smaller machines increased substantially faster than larger units with the increase in valuation roughly half that of unit shipments. While these figures are encouraging, in large part they reflect the extraordinarily low level of shipments in the first half of this year. Even with further gains in Q4, full-year 2016 shipments are likely to fall well below the already depressed 2015 level. But combined with other measures of mining market activity, these gains may be the start of an industry recovery.

Whether compared to previous reports sequentially (Q2 vs. Q1 2016), year-over-year (Q2 2016 vs. Q2 2015) or vs. the peak levels that were obtained in 2012, the latest reported deliveries are dismal. Annualizing the latest numbers would appear to result in 2016 shipments equal to less than one quarter’s shipments during 2012. And it ranks among the worst quarters in the past 20 years. There are a number of mining industry measures that appear to indicate an end to the industry-wide contraction, but these are certainly not yet reflected in equipment shipments tracked by Parker Bay.

The value of shipments declined again in the first quarter of the year by nearly 9%; and across all product lines, measured by units delivered, by a substantial 17% from Q4 2015. The large discrepancy between the two owing to some gains among the largest trucks and shovels. The decline was not uniform by product, market or manufacturer and quarter-to-quarter changes may not be representative of longer-term market shares but the cumulative results are nevertheless discouraging.With the total now below 500 units, follow-up reporting by participating manufacturers may change the magnitude of the decline by a greater percentage than when the totals were much higher at the peak. But it seems likely that whatever further reporting may occur, the market contracted yet again. Given the severe contraction that has already occurred, the decline in shipments is fewer than 100 units and a small percentage of the peak levels. But the successive quarterly declines over the past four years brings the cumulative reduction in deliveries to more than 75%. By way of comparison, we calculated the comparable contraction during the last cycle that began in the late-1990’s and it was just under 40%. There are some changes in the level of product and geographic coverage between these two time-frames, but there’s little doubt that the current decline is far more severe than the last one.

Measured in dollar value of equipment, fourth quarter deliveries declined an additional 4.5% from the 3rd quarter and 26% year-over-year. That means current shipments are nearly 75% lower than the cyclical high reached in the first quarter of 2012. But while the total value of equipment deliveries continued to fall, units shipped actually rose by more than 6% in the 4th quarter. This divergence is the result of both an uptick in the smallest size classes, particularly trucks and dozers, and a further deterioration of deliveries of the largest trucks, electric shovels and hydraulic excavators.As we’ve mentioned previously, the larger size classes tend to lag a couple quarters behind their smaller counterparts in the overall market cycle. But while an increase in unit shipments is promising, we do not appear to be on the cusp of a strong recovery. More likely the mining equipment market has reached the point where mines can’t further delay the replacement of aging fleets. This replacement demand should at least put a floor on machine shipments in the short term and act as the primary driver for a return to growth in the coming years.Parker Bay’s recently released “”Market Analysis and Forecast Loading & Haulage Equipment” analyzes the historical evolution of the market and the current conditions facing the sector and forecasts the demand for equipment through 2020 by region, mineral and size class.

The mining equipment sector failed to hold the small gains recorded in the second quarter, falling to new cyclical lows in Q3 2015. The market was down more than 5% in unit deliveries and around 9% in equipment value, reflecting a greater decline in the larger size classes. This constitutes barely a fourth of the equipment shipped in the first quarter of 2012 when the market peaked. While there may be minor revisions in the coming months, it is unlikely to raise the reported total by more than a few percentage points if that.No geographic market has been spared the downturn, but areas such as Asia, Australia and Latin America that saw the largest growth in machine populations throughout the minerals super cycle have been hit particularly hard. Many of these mining markets now have surplus capacity that is no doubt suppressing new machine deliveries and will continue to do so at least in the short term.Though we believe that we’re seeing the bottom of the current contraction, it appeared that way a year ago before mineral markets deteriorated further and the small uptick in shipments reversed course. Though mineral markets aren’t expected to recover substantially in the near future, replacement demand will drive new deliveries higher as the market works through the surplus stock of equipment and miners are forced to replace machines that are already beyond their typical service life. Parker Bay’s “Market Analysis and Forecast Loading & Haulage Equipment” report analyzes the changes in the mining equipment market and forecasts equipment demand through 2020. The full report will be published in the coming weeks.

Total units shipped increased by just 2.5% vs. Q12015. Excluding the value of a single large and very high-value dragline delivered in Q1, the value of shipments (Parker Bay estimate, market level prices, fob manufacturer) also increased by 2%. Considering the severity of the Q1 decline and the magnitude of this latest increase, the result gives little reason for optimism short-term.By product line, mining truck deliveries (which account for a majority of all shipments) increased by just 6%. If the current shipment rate continues in the second half of 2015, deliveries will fall by roughly 20% vs. the already very weak 2014 total and less than a third of the peak truck shipments achieved in 2012. There was a significant shift in the size of trucks delivered during Q2: units with payloads of 231-mt and greater declined by 11% while those in the 90- to 190-mt range increased by 13%. This might reflect the severity of large mining companies’ cuts in capital expenditures as they relate to the very largest developments. But we do not expect this to evolve into a long-term shift away from the higher-capacity units.Unlike the modest gains in mining truck shipments, deliveries of excavators/loaders rebounded sharply during Q2 with overall shipments up nearly 50% with gains driven by both hydraulic shovels/excavators and wheel loaders. At this rate, shipments of excavators/loaders will roughly equal 2014 totals but fall below the 2012 number by more than 60%. As with mining trucks, there was a significant shift between size-classes. Units with payload ratings of 35-mt or lower nearly tripled from the severely depressed Q1 number, while units with payloads of 40-mt or greater declined by 13%.

The market for the largest mobile equipment utilized by the world’s highest-producing surface miners retraced modest gains achieved at the end of last year and fell below the lowest levels recorded for the current market contraction. After revised gains of 4% in the final quarter of 2014, deliveries were down more than 17% in Q1 2015.
Parker Bay previously noted the gains in the second half of 2014 as potentially signaling a market recovery while also noting that the volume and percentage of those was quite small. The latest numbers appear to contradict that assessment. Whatever recovery might be taking place in mining markets is having negligible effect on demand for large surface mining equipment to date. It now seems likely that 2015 will be no better or only marginally better than the very depressed 2014 levels. And any sustained and substantial recovery will occur in 2016 or later.

The final quarter of 2014 offered further evidence that the worst may indeed be behind us as we noted last quarter. Fourth quarter shipments were up 3% over the previous quarter. While by no means the swift recovery we saw in 2009, it is nonetheless a positive sign for the industry. Unit deliveries were 2% higher than Q3 and more than 13% above the second quarter.
But despite the positive finish to 2014, year-over-year shipments were down nearly 40% and more than 63% compared to 2012 deliveries. Replacement demand remains a key factor with few shipments to new operations. Depressed mineral prices continue to impede a strong return to growth but barring a significant drop in mineral production, the mining equipment market could continue its slow recovery in just maintaining the existing stock of equipment.

After two and a half years in decline, the mining equipment market turned up slightly in the third quarter. Unit deliveries were 12% higher than 2Q though the increase on a value-weighted basis was less than half a percent. As can be surmised, shipments of the very largest machines continued downward for the most part with growth coming from the smaller size classes. Larger equipment classes typically lag some months behind in the cycle so increasing value as well as unit volume could characterize coming quarterly deliveries.
Deliveries to copper mines were down nearly 50% from 2Q to 3Q after faring best among mineral classes through the downturn through June. While coal and gold mines, where equipment deliveries fell more than 80% in the past two and a half years, both appear to have bottomed out or even turned up slightly. Replacement demand is likely a major factor in recent quarters with no new operations taking equipment in 3Q. While the need to replace the growing number of older units could boost deliveries further, stronger mineral market conditions will be needed to drive a healthy recovery.

Equipment deliveries to surface mining in Q2 were down 20% over Q1 and approximately two-thirds from the peak quarterly shipments level achieved in 1Q 2012. The market has now fallen below the lowest point of the 2009 contraction to levels not seen since the the start of 2005 when the industry was in the early stages of a 5-year growth cycle.
Given the severity of the current contraction, Parker Bay considers the 2Q shipments levels as a bottom for the equipment markets globally. However, several factors point to continued low levels of equipment deliveries including: ongoing weakness in demand for some minerals; reduced pricing for many others; greatly reduced capital expenditure plans for many major mining companies; and substantial numbers of equipment currently idled and for sale.

After a full two years in decline, mining equipment shipments are now hovering just slightly above the nadir reached in 2009 following the financial crisis. The first quarter of 2014 had the second fewest deliveries in the past 6 years.
Copper remains the strongest performer among the major mineral classes. For the second consecutive quarter, more equipment went to copper mines than coal; this compared to the last expansion cycle when deliveries to coal mining were nearly two and a half times that of copper. Nonetheless, coal shipments increased slightly after bottoming out in the fourth quarter of last year with less than a fourth as many units as two years prior.

Equipment deliveries were down another 7% in the final quarter of 2013. And just under 40% year-over-year compared to 2012. Seven quarters into the current down cycle, mines took delivery of forty percent as many machines as Q1 2012. While coal and gold continue to drag the market lower, mining equipment shipments to both copper and iron ore recovered in the final quarter. Copper in particular was up nearly a third in Q4 after four quarterly declines. It accounted for a fourth of all deliveries compared to its 12% share during the last growth cycle. This helped drive the Latin American market higher with more shipments than North America and Australasia combined.

Losses slowed in the 3rd quarter but continued their downward slide. The shipments total fell a further 10% for the quarter and now stands more than 50% below the total achieved in Q1 2012. While still above the absolute numbers delivered during the 2009 downturn, the relative/percentage decline is now greater than that down-cycle. And this downturn has extended longer than that one with the sixth consecutive quarterly decline. Hopefully the worst is over.

After showing some initial signs of recovery in Q1 with some of the smaller size classes leveling off or even growing slightly, second quarter results erased any hopes of a turnaround, coming in nearly 30% lower.  The market is now down 46% since the first quarter of 2012, surpassing the percentage decline in 2009 following the financial crisis. While equipment deliveries to coal mines have declined steadily since the current downturn began early last year, other mineral applications held up fairly well. But as iron ore and copper prices remain well below their 2011 peaks and with gold prices plunging since late last year, second quarter shipments to these key minerals saw their first significant drops of the current down cycle.

The first quarter of 2013 saw the fourth consecutive quarterly drop in mining equipment deliveries. However losses have slowed from the end of 2013 back to single-digits. But after a full year in decline, the market is off 25% from Q1 2012 and closer to a third in terms of the number of units.  In a somewhat positive sign for the market, Q1 2013 saw a slight uptick for some of the smaller size classes of equipment which had experience the sharpest declines to date. While not enough to offset the continued losses at the other end of the scale, this is the first indication that we may be reaching the bottom of the current down cycle. Deliveries of larger machines tend to lag a couple of quarters behind in the cycle.

Quarterly shipments were down 14% in the final quarter of 2012 and 12% YoY. This is the first year over year decline since the start of 2010. However despite finishing with 3 negative quarters in a row, 2012 shipments as a whole were up over 15% relative to 2011 coming down from the historical highs reached in the 1st quarter of last year.  The last downturn, which began at the end of 2008 lasted only 3 quarters though the drop was more severe than we’ve seen thus far. Units shipped are still twice what they were when the market touched bottom in the 3rd quarter of 2009. And with the unprecedented levels reached in the most recent expansion, it may take a little longer to return to growth this time.

While still one of the highest quarterly totals ever recorded, units shipped dropped 10% vs. Q2 and over 17% vs Q1 (likely the high point of the most recent cyclical expansion). Given these results and the widespread indications of other mining industry negatives, it is all but certain that the large mining equipment industry has entered a cyclical decline. The questions now are ones of degree and duration. It’s worth noting that even if the fourth quarter results decline substantially, it is most likely that year-over-year comparisons will show 2012 shipments as having increased vs 2011.  But Q3 was the first period that showed an unfavorable comparison to year-ago results and these are likely to continue into 2013. We are preparing an analysis of these trends along with a short- and long-term forecast of the mining truck and loading equipment markets that updates a report Parker Bay issued late last year (and which projected the current downturn).

After four consecutive quarters of record highs, the surface mining equipment market was down 5% in Q2. And with sharper declines for some of the smaller machines, units shipped actually fell closer to 8%. Whether this is the start of a more pronounced and extended correction remains to be seen. But despite the decline, this was still the second strongest quarter ever for surface mining equipment deliveries, up 26% year over year and slightly above Q4 2011.  And some products and size classes actually saw significant gains for the quarter but with longer lead times, this may have more to do with lagging behind than bucking the trend. Barring a huge decline in the second half, annual shipments will be up again for the year. What happens in the third quarter will indicate by how much. Four of the last six negative quarters were followed by a return to growth. 2009 on the other hand saw three consecutive quarters with 15%+ drops.

2012 began much like 2011 ended with yet another record quarter for surface mining equipment shipments. More than 3 times as many units were shipped in Q1 2012 as in the third quarter of 2009 when the market bottomed out. The mining equipment market has seen a spectacular double digit average quarterly growth rate in shipments over this period. When taken in this context, the 5.6% quarterly increase in Q1 2012 could indicate that shipments growth is slowing, though the index is not seasonally adjusted and historically 1st quarter shipments tend to slow a bit.  Parker Bay anticipates that shipments will more or less level off for the remainder of 2012 and then decline in 2013 before returning to growth. Parker Bay’s analysis and forecast of the mining equipment market will be further detailed in the upcoming edition of its Loading and Haulage Market Report.

Mining equipment shipments in the fourth quarter of 2011 reached a new historical high for the third consecutive quarter. The previous record was set in the final quarter of 2008 immediately preceding the downturn. The most recent figures are up 40% YoY and more than 150% since the market bottomed-out in the third quarter of 2009. This continues the sharp return to growth for the mining equipment market with only one negative quarter among the last 9.  And even that one is attributable more to seasonal variation than an actual downtick in equipment demand.