Analysis of promoting and hindering factors in mining machinery industry

First, mining machinery industry promoting factors analysis

(1) Downstream supply-side reform, the industry market concentration continues to strengthen

Since 2013, due to the importance of green economic development, the state has taken the measures of "closing small mines and opening large mines", gradually opened the supply side reform of sand and gravel mines, and forced small and micro mining enterprises with small production capacity and irregular environmental protection measures to gradually withdraw from the market. Attracting central enterprises with financial strength and high environmental protection standards, local state-owned enterprises and some powerful private enterprises began to enter the sand and stone mining industry. In 2019, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Natural Resources, the Ministry of Housing and other ten departments jointly issued the "Several Opinions on Promoting the High-quality Development of the mechanical sand Industry", requiring that by 2025, the capacity of ultra-large mechanical sand enterprises with an annual output of 10 million tons and above should account for 40%. Outdated production capacity that fails to meet standards in terms of emissions, energy consumption, water consumption, quality and safety will be eliminated in accordance with the law. During this period, the number of registered sand and gravel mines in the country dropped from 56,032 in 2013 to 17,351 by the end of 2022, the number and proportion of medium, large and super-large mining enterprises increased significantly, and the proportion of small and micro mines decreased year by year.

(2) The implementation of the "Belt and Road" strategy has brought new market growth

Cooperation in the field of mineral resources is an important part of the implementation of the "Belt and Road" strategy, and is a key area to transform geographical proximity and resource advantages into economic growth advantages. The countries along the "Belt and Road" have rich mineral resources and are the main supply base of mineral raw materials in the world. Among them, the Central Asian region is concentrated and very rich in mineral resources, but there is a general problem of relatively weak exploration, development and exploitation capacity, infrastructure construction mainly relies on foreign capital support, and key equipment is mainly imported from developed countries, so although it has obtained a lot of economic benefits with its resource advantages, it is also facing a lot of pressure to reduce costs and increase efficiency. In the context of mining globalization, the countries along the "Belt and Road" and China have a good foundation for mineral resources cooperation, and resource cooperation can further promote production capacity cooperation and economic interconnection, laying the development foundation for the construction of a regional community of destiny. Therefore, the mineral cooperation of the countries along the "Belt and Road" is the only way to achieve complementary advantages. Today, many countries along the Belt and Road have deeply realized that through the construction of the Belt and Road, they will be able to share the dividends of China's reform and development, and transform the advantages of resources, technology and capital in the region into market and cooperation advantages. To this end, countries are enthusiastic about mining cooperation along the route. Therefore, domestic mining machinery manufacturing enterprises can really "go out" in the implementation of the "Belt and Road" strategy and fully enjoy the dividends of openness and cooperation.

(3) The continuous rise in metal prices has brought about a continuous increase in downstream expansion intentions

In recent years, metal prices have continued to rise, for ferrous metals, in the past two years, iron ore prices have risen significantly in the shock, from 2019 to June 30, 2022, China's iron ore index has grown from 254.10 to 440.88. For non-ferrous metals, the trading price of non-ferrous metals in China has been affected by international trade friction since 2020, and the overall trend is rising, and the price index of non-ferrous metals in China has increased by 14.30% in 2020 and 17.10% in 2021. Under the upward trend of metal prices, the willingness of domestic mining enterprises to expand production will be fully opened, and the continuous investment willingness of downstream metal mining customers will be high, which will bring stable business sources for the industry and form a strong growth driver.

(4) The demand for downstream sandstone building materials industry is stable and is expected to maintain steady growth

In the 14th Five-Year Plan, the state clearly pointed out that it will promote infrastructure construction in a coordinated way.  At the same time, a series of measures such as national supply-side reform, green mining, illegal sand mining into punishment, and environmental protection law revision will stimulate the demand for mechanical sand, while driving the market demand for mining machinery industry such as crushing and screening.