INDIANAPOLIS—Challenged. Extremely difficult. Suffering. The new normal.
Those are some of the short descriptions belt manufacturers, fabricators, distributors and suppliers used when discussing the current state of segments of the mining and oil and gas industries.
Sectors that have contributed the most to the loss of business in the mining market have been principally coal, iron ore and copper.
“Mines are postponing new projects, trying to save money,” said Boris Illetschko, who heads Semperet A.G.’s Sempertrans business. “They are trying to repair rather than replace belts. Nearly all commodity prices are down in coal, copper and ore.”
He said a mining boom in the short term was highly unlikely, “and the same holds true for crude oil. We need more balance in supply and demand.”
Jim Hill, CEO of ContiTech A.G.’s NAFTA business, has experienced virtually everything in the heavyweight belt market during his 28 years in the industry. So he maintains a calm demeanor.
“There’s no doubt that this is a challenge for all of us—both in NAFTA and worldwide,” he said. Like Illetschko, he cited coal, copper and ore as the three biggest areas of concern in the mining sector.
Demand in down cycle
“After a series of acquisitions over the past years, the conveyor belt industry has become highly concentrated and quiet, and some customers are actively seeking to broaden their supplier base again,” Illetschko said at the NIBA—the Belting Association conference, held Sept. 14-17 in Indianapolis.
A key factor influencing the belt business is that demand is down because “falling prices for commodities such as copper ore, iron ore and coal result in cautious decisions about new mining installations and mine extensions,” he said. “Also, required conveyor belt replacements are considered very thoroughly due to cost pressures of our customers.”
Illetschko said a sluggish economy across the globe, and especially in China, not only does not support new demand but is also the underlying factor for low prices for mining commodities. All the factors combined lead to less demand for new and replacement conveyor belts, he said.