Drilling Equipment and Consumables Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on Drilling Equipment and Consumables

• Commodity price increase coupled with declining ore heads are the key market drivers
•  Shift of market focus in consumers preference in partnering equipped with best technology suppliers have been witnessed  as an emerging trend in major regions such as Australia, Canada to optimize  the buyer's total cost of ownership

Market Size and Trend

• Global demand for drill equipment is expected to grow at a moderate CAGR of 1.8–2.2 percent until 2019, driven by increase in exploration activities owing to elevated commodity price. The elevated demand in exploration activities coupled with robust technology-based effective drilling solutions are expected to impact the drill equipment industry positively over the forecast period
• Asia Pacific is expected to account for 55–60 percent of the drill equipment market in 2016 in terms of revenue. China, a major mining country is expected to dominate the production drill equipment market with growth rate of around 3-4 percent until 2018; and other emerging economies of South East Asia is expected to grow at a CAGR of around 6 percent during the same period
• The global drill equipment market consolidated with major OEMs such as Atlas Copco, Sandvik, and Caterpillar capturing 80 percent of the market share while remaining is constituted by other service providers such as Boart Longyear

Global Drilling Equipment - Market Drivers and Constraints

Drivers

Increase in Commodity Demand/Price:

• Commodity demand is a result of the global economic situation. The average commodity price is expected to grow between 5 percent and 6 percent until 2017. Increase in commodity demand will drive up the market for production and exploration drilling equipment.

Decrease in ore grades at mine (surface and underground mining):

• Falling in ore grades results in increased exploration activity, which in turn, acts as a driver for the rise in demand from the drilling equipment segment. In South America, a key mining region, copper and gold head grades are expected to decline by 21 percent and 18 percent, respectively, during 2014–2024

Constraints

Mining Slowdown:

• Reduction in mineral output from mines and closure of high cost mining operations due to the current mining industry slow down is adversely impacting drilling equipment and consumables demand

Reducing Exploration Spend:

• Reduction is exploration spend in new mining activities across all major mining regions has severely impacted the demand for exploration drilling equipment. The spend in mineral exploration has decreased by 19 percent in Asia and around 12 percent in Australia in 2016