Welcome time back ‘on patch’
First publishedin Aggregates Business International
During my time as a daily print newspaper journalist and as editor of Aggregates Business Europe & International magazines, the most enjoyable part of the job has been out working ‘on patch’.
You get a far better insight into what is really happening on the issues and sectors you are covering by talking face-to-face with quarry owners and contractors, and representatives of global and key regional original equipment manufacturers (OEMs). In the context of this magazine, 2018 has seen me out and about on patch in South Africa in March, at bauma CONEXPO Africa in Johannesburg, and in South Korea in June, seeing how premium Metso crushing and screening plant is helping major quarrying and mining customers achieve optimal efficiency in their various operations.
This issue’s China Market Report has given me the perfect opportunity to swot up on key issues and trends within what is the world’s largest aggregates and construction equipment market ahead of my trip with Mike Woof, editor of Route One Publishing’s sister magazine World Highways, to cover the bauma China 2018 exhibition in Shanghai (27-30 November).
While the international news has recently been full of the trade tariff dispute between China and the U.S., and the two superpowers jockeying for position in the negotiations with North Korea over its potential denuclearisation, China’s president Xi Jinping has been ruling his country from an even greater position of strength. In March 2018 the Communist Party-controlled National People’s Congress passed a set of constitutional amendments, including the removal of term limits for the president and vice president.
Alongside such big political developments both in China and in its relations with key nation states in the wider world, Chinese aggregates and construction and quarrying equipment demand is extremely strong. This is partly due to major new infrastructure projects, including those linked to the ‘One Belt, One Road’ initiative, which focuses on connectivity and cooperation between China and Eurasian countries via the land-based Silk Road Economic Belt (SREB) and the ocean-going Maritime Silk Road (MSR). Indeed, Off-Highway Research, a leading global industry market research consultancy, is tipping sales of construction equipment in China to exceed 325,000 units this year. This equates to 30% growth on 2017, following on from an 81% increase in demand in 2017 compared to 2016.
In this edition’s Market Report, David Beatenbough, LiuGong’s vice president of research & development, provides crucial context to the last two years’ big rises in Chinese construction equipment sales, saying: “The recent market growth has two elements shaping demand. The first is fleet replenishments – the first part of the recovery of the last two years was driven by the need to replace older machines that remained in fleets during the depressed industry of the last several years. Now after two years of recovery, the replenishment portion of the recovery should be coming to an end.
“Current increases are being driven more by true increases in demand. There is more work available for machines, confidence is increasing, and fleet expansion is underway.”
Making specific reference to the Chinese quarrying and mining sectors, Beatenbough continues: “Commodity prices have recovered somewhat, so activity is increasing. This is tempered by reforms and controls by the government to improve working conditions in these industries and to manage economic growth according to plan.”
It is fair to say that given the fine health of construction, quarrying and mining equipment demand, coupled with global premieres and regional launches of new models, the bauma China 2018 exhibition will be a very worthwhile week back out on patch.