Komatsu warns mining slump to stay till 2017

Global miners will continue to refrain from buying large diggers and dump trucks until at least 2017 as falling commodity prices cool investment, according to the chief executive of Komatsu, the world’s second-biggest, after Caterpillar, supplier of mining equipment.

“We won’t likely see a recovery in 2016 and we are uncertain about 2017, given current commodity prices and the sentiment of management at mining companies,” Tetsuji Ohashi told reporters in Tokyo on Thursday, after Komatsu posted a 19% decline in second-quarter net income.

When a rebound does come, demand for machinery used in copper mining is likely to pick up faster than other commodities, Ohashi said. A recovery in thermal coal mining would probably be next, while iron ore would be last. Tokyo-based Komatsu trails only Caterpillar of the US as a supplier of mining and construction equipment.

The rout in commodity prices is piling on the pressure for Komatsu and its peers as the mining equipment market contracts for a fourth consecutive year. At current prices, miners aren’t ready to spend on new equipment, although customers are repairing their existing fleets albeit gradually, he said.

World copper supply is set to move to a deficit in 2017, Andrew Michelmore, chief executive officer of Hong Kong-listed miner MMG Ltd., said earlier this month.

Producers of the metal have cut output after prices fell to a six-year low due to China’s slowdown. However, the recovery in iron ore is much less certain as major low-cost producers in Australia and Brazil ramp up output and new supply comes online.

Komatsu reiterated this week it expects sales of mining equipment to fall 15 percent in the year to March.

Source

(Visited 92 times, 1 visits today)

Get involved

Register

As a member of this site you will be able to receive aggregates news relating only to those categories that are most relevant to you, submit job listings for FREE, post questions in the Q&A, and more.

Register Now

Feature your company

The Feature Your Company listing is your custom-made (by us) profile page that allows you to add any of the following content: text, videos, links, images. The page will also be listed on the Featured Company landing page. Over 560 unique aggregates users visit the site per day! Complete the enquiry form now to contact us.

Contact us

Jobs

Are you looking for an aggregate related job? Click here to see our jobs listing supplied by industry experts United Employment.

See Jobs

Advertise

Reach thousands of budget holders and decision makers by promoting your company on the longest established aggregate website in the US & Canada. Or advertise in our emails which are sent to opted-in subscribers according to their chosen categories. All advertising will display correctly on tablets and mobiles as this site is responsive.