The first quarter of 2025
First quarter shipments (shipments): following a significant increase in shipments in the last quarter of 2024, it is not surprising that we expect only a moderate 2% increase in the first quarter of 2025. We believe that a moderate 2% increase in both shipment volume and sales is a continuation of the recovery and expansion cycle. If the delivery volume can maintain the level of the first quarter's shipment volume (2.4 billion US dollars), then the full-year delivery volume will bring the manufacturer the highest equipment revenue since 2012. Note: These valuations are very rough and may not be applicable to specific manufacturers. Perhaps a more appropriate comparison method would be the number of machines delivered: 1,400 units; It increased by 25 units compared with the previous quarter, but it is still far lower than the shipment volume of nearly 2,000 units in the first quarter of 2012.
As with all previous market changes, there were significant differences in products, geographical regions and mineral applications in the first quarter. Some of the more notable changes are summarized as follows. If the client compares the current distribution with the peak of 2012 mentioned above and conducts a more in-depth analysis, the differences will be discovered.
Product: The shipment volume of mining trucks increased by 5% in the first quarter, but the total value only rose by 3%. This difference is caused by the change in the combination of large and small levels: The payload units of 90-110 tons have increased by more than 12%, while the super-large levels of 290 tons and larger have also increased significantly. However, these increases were largely offset by a 27% decline in the 218-255 tons class. Following a significant increase in excavator shipments in the fourth quarter, unit deliveries rose by 12%, while wheel loader shipments declined by 8%. The most significant change in the first quarter was in the bulldozer sector. The 168 units delivered were the lowest level since the fourth quarter of 2020. Parker Bay is unaware of any long-term changes behind this figure and expects it to return to a level of over 200 units in the coming quarters.
Geographic regions: As in the past, there were significant differences in the geographical location changes of mines, contractors, and lease/lease entities (overall) in the first quarter. Shipments to the Latin American business increased by one third, reversing the continuous downward trend in the fourth quarter. Australia's shipment volume increased by 9%, mainly due to the rise in shipments to mines in Indonesia. Since the first quarter of 2023, the shipment volume from Indonesia has exceeded that to Australian mines for the first time (basically on par with the fourth quarter). Offsets these growth by a decline in shipments to Africa (-17%), Asia (-29%), North America (-24%), and Russia/CIS (-13%).
Mineral markets: The long-term downward trend in global demand for coal mining equipment halted in the first quarter, but it may only be temporary. Coal remains the largest single mineral category. The increase in copper (+4%) and iron (+5%) was relatively small, while despite the strong market conditions and the rise in gold mine prices, the shipment volume of gold mines still dropped by 12%. This should be viewed in combination with the delivery volume in the second half of 2024, which is higher than the total volume of any half year since 2013. This reinforces our warning: Whether it is for mineral categories or geographical regions, the formulation of quarterly indicators must be combined with long-term demand.
The index compilation explanation: The PBCo Mining Equipment Index measures the quarterly changes in global open-pit mining equipment shipments. This index is based on the data from the Parker Bay Mobile Mining Equipment Database and covers the same range of products as the database *. This index uses the value of equipment rather than the quantity of equipment as the measurement standard. For instance, an excavator priced at 10 million US dollars weighs the same as five trucks priced at 2 million US dollars each. Value is not based on the selling price of each device, but on the approximate value assigned to the machine by size category and product, expressed in constant US dollars (updated annually). Therefore, this index does not reflect changes in equipment prices but rather the overall sales volume. The base of this index is the first quarter of 2007 (Q1 2007) =100, and the quarterly data has not been seasonally adjusted. All products are included except for the bucket shovel. The low sales volume, high value and long delivery time of the bucket shovel may lead to sales fluctuations, and these fluctuations cannot reflect the quarterly changes in the market.
The market size of mining equipment in Latin America - Komatsu's path to success in Latin America
In 2024, the market size of mining equipment in Latin America was 7.76 billion US dollars. It is expected to increase from 8.19 billion US dollars in 2025 to 12.62 billion US dollars in 2033, with a compound annual growth rate of 5.56% during the forecast period from 2025 to 2033.
Komatsu Co., Ltd. has long held a strong position in the Latin American mining market. Through its own distributors, Komatsu directly interacts with mining users, promoting investment, direct contact and contract services, and has established a high-profit business model in the Latin American region. Latin America has become Komatsu's second-largest revenue-generating region globally, second only to North America.
In the Latin American market, mining business accounts for 70% of Komatsu's total sales, while construction and other businesses only make up 30%. In contrast, 70% of the mining business sales are divided into equipment (16%), components (24%), and services (30%). The global mining business sales account for 43% of the total sales, among which equipment (14%), components (18%), and services (11%).
Komatsu's first overseas export was to Argentina in 1955. In the 1970s, Komatsu established its first overseas factory in Brazil, marking its long history in the Latin American region. In recent years, Komatsu has continuously expanded its direct selling business model, mainly focusing on the mining industry. This model was initially established in Chile in 1999 and subsequently expanded to Mexico (2016), Peru (2009 - holding a 40% stake in Komatsu Mitsui Machinery in Peru), Colombia (2016), Panama (2018), and Brazil (2013).
By country/region, Komatsu has over 1,100 electric mining dump trucks, more than 100 large electric shovels, drilling RIGS and underground equipment, as well as approximately 350 large auxiliary support devices such as bulldozers and graders in Chile alone. Komatsu's dealership in Chile is its first direct-operated dealership in Central and South America. Komatsu has deployed a large number of equipment and personnel in Chile to support large-scale mining operations and has established a business model that provides direct sales and services to mining customers, thereby achieving a stable high absorption rate of over 300%. Komatsu has over 9,000 employees in Chile, making it the country with the largest number of employees after Japan and even surpassing the United States.
About 50% of the mining equipment in Chile has signed service contracts. Its main remanufacturing center is located in Antofagasta, responsible for major overhauls of components such as engines, gearboxes, and cylinders. This factory model has also been expanded to Mexico, Colombia and Brazil. When it comes to Brazil, in the construction equipment market, Komatsu has been conducting business through local distributors since the 1970s (currently cooperating with 7 distributors). In the mining sector, Komatsu acquired the mining division of a local distributor in Brazil in 2013 and established a direct operation model. Subsequently, it made further investments.
Komatsu opened its first overseas factory, KDB Suzano, in Brazil in 1975. This factory produces approximately 3,000 units annually, covering 34 different models. It not only supplies the domestic market of Brazil but also sells to countries in North America, Europe and Central and South America. This base mainly produces hydraulic excavators, wheel loaders and floor cranes, and is also a global manufacturing and distribution base for medium-sized crawler tractors exported to all continents.
To strengthen its relationship with major mining users, Komatsu is actively promoting investment and enhancing its operational bases. Its main maintenance center in the north is located in Apebas, Palau, but the company will open a larger new maintenance center there after investing over 7 million US dollars in 2024. The company has a large maintenance center in Sao Paulo, an office and maintenance center in Belo Horizonte, and is also building a new factory which is scheduled to be put into use in 2025.
Komatsu has also been a pioneer in the field of autonomous transportation in Latin America - in 2005, Komatsu conducted the world's first test run of AHS at the Codelco Radomiro Tomic copper mine. In 2008, the Gaby copper mine in Codelco conducted its first commercial operation.
Currently, Komatsu has a large number of self-driving mining trucks in Latin America. The operating sites are distributed in Vale Carajas (2019), Anglo American Los Bronces (2022), Glencore Lomas Bayas, AMSA Centinela, Collahuasi and BHP Escondida and BHP Spence. Komatsu also opened an AHS support center in Chile in 2020. Since May 2023, the large-scale ICT bulldozer remote control system has also begun commercial operation at Anglo American's Minas de Rio iron mine in Brazil.