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 mining 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

Drilling Tools Market Overview

• Mining drilling equipment components are sourced from multiple vendors and supplier power towards equipment is medium due to the fragmented nature of the supply nature.
• The global drilling tools market is highly concentrated with Atlas Copco and Sandvik controlling around 54 percent of the drilling equipment market.
• Many Tier-2 and 3 brands are available but performance is suspect.
• High intensity of rivalry due to the presence of large number of global and domestic players.
• Since high capital investment is required, new entrants find it difficult to enter the market.
• The mining drilling equipment market is a consolidated one and the new suppliers will take years to be on par with performance and product portfolio of Tier-1 brands.
• The mining drilling equipment cannot be replaced by others due to the (highly) specific nature of operations, which demand usage of sophisticated drilling equipment to suit the mining conditions.
• The future of mining consumables and equipment lies in automation and technological developments centered around reducing man-power and improving productivity. Only a few suppliers have this advanced capability.
• Many Tier-2 and 3 brands are available but performance is suspect.
• High intensity of rivalry due to the presence of large number of global and domestic players in the drilling tools market.
• Mining drilling equipment cost structure pricing by suppliers is done based on raw material prices and demand of the drilling equipment.

Why Should You Buy This Report 

• Information about mining drilling equipment market size and trends, regional overview, outlook, drivers and constraints, market driver analysis, etc.
• Porter’s five force analysis of the global mining consumables and drilling tools market.
• Supply trends, market share and SWOT analysis of major players like Atlas Copco, Sandvik, Caterpillar, etc.
• Cost structure analysis, cost and price drivers analysis.
• Best procurement models, sourcing channels best practices in the mining drilling equipment industry and risk analysis.