Mining and Oil & Gas Machinery Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 700 mining and oil and gas machinery manufacturers in the US produce machinery used in the exploration and extraction of minerals and petroleum resources. Machinery may be highly specialized to perform a specific task or made more versatile by equipping them with various attachments. Many firms in this industry have an international presence or compete with foreign firms in their domestic market.

Dependence on Oil & Gas Production

The number of new oil and gas wells drilled and their productivity and longevity drive demand for machinery, sales of parts and attachments, and service revenue.

Fewer Coal Mines, Less Output

The number of coal mines in the US has been on a decline, reducing equipment sales opportunities for mining machinery manufacturers.

Industry size & Structure

A typical manufacturer of mining and oil and gas machinery operates out of a single location, employs 75 workers, and generates about $22 million annually.

    • The mining and oil and gas machinery manufacturing industry consists of about 700 companies that employ about 53,300 workers and generate $15.8 billion annually.
    • The heavy machinery segment is dominated by large, technologically-advanced firms with broad market reach. Not only do these large firms produce a wide range of products, but most have international operations and extensive dealer networks.
    • The mining machinery segment of the industry is concentrated with the 20 largest firms representing 75% of its revenue. The oil and gas machinery segment is slightly less concentrated with the 20 largest firms representing 66% of its revenue.
    • The aftermarket segment, which includes replacement parts, attachments, service, and refurbishment, is fragmented with many smaller firms competing based on price, breadth of products, and proximity to customers. Mining and oil and gas machinery manufacturers may partner with aftermarket suppliers to obtain parts and attachments and broaden their equipment options.
    • Large companies with US manufacturing operations include Caterpillar, Komatsu Mining (P&H, Joy, Montabert), Epiroc, Boart Longyear. and TMG Manufacturing.
    • The industry competes domestically and internationally with foreign-based manufacturers including Terex, Sandvik, XCMG, Sany, and Metso Minerals.
                                  Industry Forecast
                                  Mining and Oil & Gas Machinery Manufacturers Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Nov 10, 2022 - Mining Equipment Sales Rise
                                  • Equipment manufacturer Caterpillar in October said sales for the quarter ended September 30 rose by 21% as it sold more equipment and raised prices, offsetting rising production costs and the strengthening US dollar, The Wall Street Journal reported. The world’s largest manufacturer of construction and mining equipment reported its mining-equipment sales jumped 30% to $3.1 billion for the quarter, helped by a 66% increase in sales in North America. Also, investments in oil and natural gas production are driving higher demand for Caterpillar’s engines used at drilling sites and pipelines, according to the company. A resurgence in mining activity to support the nation’s transition to clean energy and electric vehicles and an increase in US oil and gas production following production cuts by OPEC+ in October are driving demand for mining and oil and gas machinery.
                                  • The Baker Hughes rig count report for November 4 showed drilling activity -- a demand driver for oil and gas machinery -- holding relatively steady. Baker Hughes reported 770 active US drilling rigs, an increase of two rigs from the previous count (October 23) and up 220 from a year ago. The oil rig count was 613 rigs, while the number of gas rigs declined by 1 to 155 (plus 2 rigs classified as miscellaneous). North Dakota added two rigs, while Oklahoma, Texas, and Wyoming each added one. California and Louisiana saw their rig counts dip slightly. Energy firms across the Midcontinent and Rocky Mountain region said they needed a 21% sequential increase in the average natural gas price to warrant a substantial increase in drilling during the third quarter, the Federal Reserve Bank of Kansas City reported last week.
                                  • In a move likely to drive up gas prices and encourage more domestic exploration and production – a driver of demand for oil and gas machinery – the OPEC+ energy cartel in October 2022 agreed to its first large production cut in more than two years. The cut of two million barrels a day represents about 2% of global oil production. OPEC+, led by Saudi Arabia and Russia, said it was acting amid signs of a downturn in the world economy that might cause demand for oil to weaken and prices to fall. The price of Brent crude, the international benchmark, which had eased during the summer months, rose more than 1.5% after the meeting, extending the recent gains and bringing prices back to levels last seen in mid-September, The New York Times reported. The average price of gasoline in the United States has begun to rise again, tracking the price of oil.
                                  • The awarding of new oil and gas leases has been exceptionally low under the Biden administration as it attempts to wean the nation off of its dependence on fossil fuels. An analysis by The Wall Street Journal shows that the Biden administration has leased fewer acres for oil-and-gas drilling offshore and on federal land than any other administration in its early stages dating back to the end of World War II. The Interior Department, which oversees oil leases, leased 126,228 acres for drilling during Biden’s first 19 months in office, the WSJ analysis found. No other president since Richard Nixon in 1969-70 leased out fewer than 4.4 million acres at the same point in a president’s first term. During his presidential campaign, Biden pledged to stop drilling on federal lands. The low number of acres opened for drilling under his administration shows that he is largely keeping his promise.
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