Coal Mining Continues its Hegemony in Industrial Explosives Consumption
Predominantly employed as high explosives, and blasting agents, industrial explosives have been witnessing substantial consumption in mining that holds the lion’s share in global industrial explosives consumption volume. Surging demand for metals, and coal continues to sustain the commercial market potential of industrial explosives, further favoured by an increasing activity in quarrying, non-metal mining, and mineral harvesting. While coal mining has been the largest consumer segment so far with roughly over 35% of the total consumption, metal mining follows with around a third of the world’s total consumption of industrial explosives. The demand by former is however diminishing over the recent past, and the trend will most likely prevail in response to the global sustainability drive. That in the latter is projected to flourish over time owing to specific geographical distribution of metallic minerals.
The brisk expanse of building and construction industry also works to the advantage of industrial explosives manufacturers. Continued application in the automotive industry is expected to remain a decent demand growth generator as well. Although the volatile demand pattern influenced by the cyclic process in mining industry holds a significant impact on the pace of market growth, the cheaper, and time-saving attributes of industrial explosives continue to be sought-after. Untapped opportunities foreseen in deep sea mining, and across abandoned mines further raise the scope for market growth.
Moreover, low labour costs remain an important factor driving consumption by end-use industries. Other miscellaneous application areas include military and defence, canals, road infrastructure, railroad and subaqueous tunnels, and hydropower stations. While the Y-o-Y growth prospects look plummeting through 2020-2021 on the backdrop of COVID-19, the overall long-term outlook is projected to be promising.
Bulk Explosives Reign Supreme as Preferred Industrial Explosives
Cost competitiveness, and convenience of storage, handling, and on-site delivery will continue to make bulk explosives desirable among mining companies. The superior performance-price ratio of bulk explosives remains pivotal in pushing their consumption as a preferred blasting agent. While they are widely considered as the most efficient means for large rock masses, their formulations can also be customised to suit consumer demands, as well as the geological conditions of respective application sites. On the flipside, rising packaged explosives consumption by the construction industry is likely to complement the growth of market.
The demand has been skyrocketing for excavation of hard rock masses in underground metro projects such as the one ongoing in India. Blasting, and drilling present the most cost-efficient alternative to metro rail project operators as they deploy the controlled blasting technology (CBT) introduced by the CSIR's Central Institute of Mining and Fuel Research (CSIR-CIMFR) to deal with extensive underground stretches.
TAN Consumption to Recover as Coal Extraction Regains its Lost Pace
With demand proliferating for a host of specialised, sophisticated explosive products, ammonium nitrate (AN) has been the clear ruler. In contrary to other explosive counterparts such as dynamite, the safety advantage of AN in terms of storage, and shipping accounts for its dominance. Whenever required, it can also be blended with fuel oil, which marks a strong growth driver for it. Technical AN (TAN) especially remains prominent in material extraction activities, coal mining again being the top consumer segment. The COVID-19 wave initially imposed a steep downturn on industries that prevailed almost through 2020. TAN demand witnessed a heavy plunge as coal extraction came to a standstill, resulting in a significant Y-o-Y drop. With the collapsed coal demand showing strong signs of revival as the power generation regains its momentum, the slowdown in industrial explosives is also expected to gradually wane. 2021 is thus being projected optimistic for the overall explosives market. While some countries have a well-structured, efficient, and mature AN market bound by stringent regulatory standards over its storage, handling, and shipping, the lack of uniform regulatory measures in most parts of the world continues to be an impediment to rapid AN consumption, especially exports and imports.
Coal, and Metal Mining Fuel Demand in Most Consumer Regions; China, and India Turn Crucial
China is expected to remain the hub of remunerative opportunities for the participants in the global industrial explosives market. Being a leading metal, and coal producer in the world, the country’s mining industry will remain instrumental to maintaining its position as one of the global leaders in industrial explosives. Moreover, the thriving construction industry across China will further continue to supplement sales. On the other hand, India is also developing a lucrative investment pocket for market participants. While the country represents a leading market within the South Asian and Pacific region, noteworthy demand for explosives is contributed by both the construction, as well as mining industries. India has been witnessing a flourishing scenario in quarrying, and coal mining sectors, which will play out as a major booster to market growth. Favourable policy framework, and strong presence of top manufacturers further uphold the market growth potential of India. Banking on their vital position in mining, Australia, and Indonesia will also remain the key markets in the region.
The building and construction industry accounts for a majority of demand in the US. The country’s mineral production capacities are expanding rapidly, projected to push the demand for industrial explosives. In 2019, the US mining recorded more than US$86 Bn in minerals alone (the US Geological Survey). Metal production, on the other side, is expected to be the key factor driving market growth in Russia, and Brazil. The former is among the world’s important producers of coal, crude steel, copper, and minerals. The latter’s prospering iron, and steel production output is likely to generate robust demand for industrial explosives. South Africa will also remain one of the most attractive markets for industrial explosives. The country continues to register significant demand from all end-use sectors, including metal and non-metal mining, coal mining, and quarrying.
Market Leaders Strive to Strengthen Supply, and Distribution Networks
NOF Corporation, Enaex S.A., Orica Limited, Dyno Nobel, African Explosives Limited, Maxam corp Holdings, Irish Industrial Explosives Ltd, BME Mining, LSB INDUSTRIES, Austin Powder Company, Solar Industries India Limited, Sichuan Yahua Industrial Group Co., Ltd., Ideal Industrial Explosives Limited, and Eurenco S.A. constitute some of the leading players competing in the global industrial explosives market. The competition landscape is highly consolidated, and leaders continue to distinguish themselves based on established B2B networks, and a long-maintained supplier base. Key companies in the industrial explosives landscape are considering convenience as the key differentiator in terms of storage, and delivery. Investments in R&D are rapidly increasing.
While end users’ demand for handy explosive products is on the rise over the recent past, companies have been relying more on advanced technologies to meet their expectations. Manufacturers have been striving for on-site delivery of bulk explosives. Delivering high performance at competitive price points is expected to be the key to unlock competitive advantage in the global marketplace. On the regional front, companies are expected to channelise significant efforts in building, and firming up their supply chain networks across developing economies that hold untapped potential for market growth. Long-term relationships with distribution partners will also prevail as a key organic growth strategy. Concerns around risks associated with the storage, and safety of industrial explosives remain the longstanding challenges. Innovations are afoot, targeting industry-specific applications of industrial explosive products.
In 2020, Orica acquired Exsa S.A., a leading manufacturer of industrial explosives in Peru. Through this acquisition, the former aspires to top the Latin American market. The company will integrate the latter’s new, state-of-the-art initiating systems (IS) manufacturing facility into its global manufacturing footprint.
Key Elements Included In The Study: Global Industrial Explosives Market
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