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Weak demand but hope on the horizon

The market for stackers and reclaimers remains fragile, with lower demand from the mining sector in particular.

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Sustained low commodity prices have severely depressed industry’s interest in purchasing new stockyard equipment, but there are deals to be done, if you know where to look. East Asian markets are holding up better than most, while demand for refurbishment is increasing, as many consumers look for low-cost solutions. Looking ahead, the big recovery in coking coal prices holds out the prospect of better days ahead.

 

Iain Barton, the global market manager for mining and bulk material handling at Conductix-Wampfler GmbH, said: “The market is slow at the moment, but there are projects about, albeit not in the same quantities and of the
same size as during the boom. China still has projects and there are ones being serviced through our German sales office, as a number of global OEMs are headquartered in the region. Greenfield sites have been most affected, and
the projects tend to be for expansions or for increasing efficiency.”


The biggest market for stackers and reclaimers has long been the mining industry, so much will depend on how quickly commodity prices recover. However, there has still been some demand from coalfired power plants, steel plants
and fertiliser producers.

 

Elena Marcato, the marketing and communication manager at Italian firm Bedeschi, says that her company has noticed a slight increase in demand outside the mining industry, including from fertiliser plants.


Schade Lagertechnik GmbH, which is part of the Aumund group, says it is generating most interest from the power sector, but has had some enquiries this year from mining and cement companies as well.


Markus Jann, the head of projects at ThyssenKrupp Industrial Solutions said: “The market situation for mining equipment, as well as materials handling equipment, is still very difficult, due to the consistently low demand of the main commodities. In the fertiliser as well as phosphate business, however, there is still a strong demand for stockyard equipment.


“Furthermore, we see a certain investment backlog at European industrial facilities, where some of the stockyard equipment reaches an age of more than 40 years, and has either to be exchanged with new equipment or costly refurbished in order to continue in business.”


Robert J. Kaib, the global director for bulk and pyro products at Metso Minerals, commented: “The market has slowed considerably due to the slowdown in the mining sector. New storage facilities are either not being planned at
the moment or are on indefinite hold, so the need for the larger capacity bucket wheel style machines is low in the mining sector.


“There are bright spots in other industries, such as fertiliser and cement, for which ‘A’ frame portal type stacker reclaimers are required. Proposal enquiry activity for yard machines is in the low range of the spectrum.” Nonetheless,
the company is hopeful that it is through the worst of the mining downturn and that a modest recovery can begin next year.

 

Protecting revenue


Lower demand from the mining sector has certainly prompted suppliers to target other sectors. ConductixWampfler’s Barton says that demand from bulk ports is still reasonable because operators are seeking to protect their revenue against lower revenue per unit weight handled. “Biomass and agribulk have different drivers and have, to an extent retained some activity,” he added.

 

Andreas Markiewicz, sales director at Schade Lagertechnik, commented: “About half of our order intake comes from the power industry and about 20% from metallurgy. Another approximately 20% is won from ports and terminals,
cement and alternative energies together. We also have good prospects to get sizeable orders from the fertiliser industry.”


Metso, too, has enjoyed some success in the fertiliser sector, and recently completed two portal style stacker reclaimers for a North American fertiliser producer, following the delivery of two mid-sized bucket wheel machines to the
power and port industries in the same region.


Metso’s Kaib said: “Generally we have seen a slowdown across the board due to the global mining capacity being reduced. However, we have seen decent activity in other industries, such as potash handling. In addition, we do see more activity with our rail handling equipment, such as rotary car dumpers, in both the established and emerging markets.”


Wang Chang, the project manager at China’s Dalian Huarui Heavy Industry International Company Ltd (DHHI), tells Bulk Materials International that his company’s best-selling equipment at present is bridge reclaimers.


The impact of the downturn is being felt in all parts of the world, including in previously resilient China. Shao Changnan, vice-president of DHHI, says that current market conditions are much worse than during the 2008-10 global
economic crisis, although this seems almost entirely because of low domestic demand.

 

DHHI is the biggest Chinese manufacturer of bulk materials handling machinery, and works closely with a number of Chinese state-owned enterprises. The company says it has had several orders from domestic firms so far this year, but not from other countries for stackers and reclaimers, a fact that the company blames on its reliance on mining sector customers.

 

However, the firm has enjoyed some success in the export market over the past couple of years. Its foreign exchange earnings were 10.4% higher in 2015 than in the previous year, and now contribute almost half of its income.
One stacker reclaimer contract with the Roy Hill Iron Mine in Australia (see Bulk Materials International, November/December 2014, p2) is valued at close to US$160M, while it has also exported nine sets of stacker reclaimers to Iran over the past three years.


Eco regulations


New regulations aimed at cutting air pollution could generate more business for suppliers. Markiewicz of Schade Lagertechnik said: “A trend that we can clearly recognise is the increase in interest resulting from new environmental regulations in markets such as China, Taiwan and Korea, where existing and future stockyards now have to be closed in. It works to our advantage that we already have references and the necessary knowhow in this area.”


A new but undisclosed coal export terminal in the Russian Far East is the recipient of a string of new machines manufactured by ThyssenKrupp, comprising conveying systems, train unloading and shiploading equipment, as well as two combined stacker reclaimers. Also in Russia, Schade Lagertechnik supplied a reclaimer with 200 tph handling capacity and a 54m rail span to fertiliser producer PhosAgro Cherepovets in August. This contract also includes two 100 tph full portal reclaimers and one 400 tph full portal reclaimer that will be delivered in January to handle potassium salt, ammonium sulphate and NPK.


In June, Schade Lagertechnik announced its first order from the power sector in the former Soviet Union. It is to supply a full portal reclaimer for the coal stockyard at the GRES 1 power plant at Ekibastuz in Kazakhstan, with handling capacity of 2,800 tph, plus a tandem wagon tipper. With a delivery date of mid-2017, the reclaimer has been designed to operate in low temperatures of down to -30 degC at the Central Asian plant.


South East Asia has been one of the most active areas for new contracts this year, including at the Tan Thang cement plant in Vietnam. Bedeschi is to supply the facility with a stacking and reclaiming system for handling raw material additives, such as clay, iron ore and silica. It will comprise a luffing stacker with a capacity of 300 tph and a bucket reclaimer with a capacity of 200 tph. It will also supply a stacking and reclaiming system for coal with a 200 tph luffing and travelling stacker and a side type scraper reclaimer, with capacity of 100 tph.


The Italian firm has also signed a contract to supply a 200 tph capacity luffing stacker and a 120 tph bridge reclaimer to the Hpa-An cement plant in Myanmar. The client asked for a system that can combine a wide range of different types of coal from different mines and providing different calorific ratings. Bedeschi will also provide a side scraper reclaimer to PT Indocement to receive and store slag, even when it is moist and sticky.

 

Earlier this year, meanwhile, Dimisa Mexico contracted Bedeschi to undertake a supply contract for the Blue Dolphin Power Plant expansion project located in Mejillones, Chile. The end customer is ECL, one of the Chilean Power Utility market leaders. The project consists of realising a coal stacking and reclaiming system with a total stored volume of 160,000t. The supply contract includes a luffing slewing and travelling stacker with a 55m boom and a stacking capacity of up to 3,000 tph.

 

Elsewhere, ThyssenKrupp has signed a contract with a customer in the Netherlands to supply stockyard and port handling equipment in three phases between now and 2022. The agreement includes the provision of three combined
bucket wheel stacker reclaimers and two barge loaders, with the first of each of them supplied at the start of 2017.

 

Refurbishment


As ever during economic downturns, there is currently a clear trend for customers to refurbish and/or retrofit existing machines, rather than buy new ones, according to Jann of ThyssenKrupp.

 

For his part, Metso’s Kaib said: “The usual trend in a downturn market, such as we are currently experiencing, is to refurbish, renew and upgrade, in lieu of capital expenditures. However this is certainly market-dependent. Emerging markets continue to have a need for capital expansion, for example in the power sector. Established markets do indeed pursue renewal, upgrades or refurbishments during industry downturns.”

 

Some companies claim that they are being asked to convert machines originally supplied by other manufacturers – usually low-cost suppliers, but sometimes also from reputable competitors.

 

However, Markiewicz of Schade Lagertechnik does not believe refurbishment is always the best option. He argued: “There are certainly some cases where making modifications in order to upgrade makes sense, but we check intensively with every customer whether new equipment could possibly be the preferred solution for their situation in the long term.

 

“Because the development of our machines is an ongoing process, the customers benefit from our intensive product development if they purchase a new machine. These advantages can often be utilised to a lesser extent if converting an existing machine rather than installing a new one.”


Getting smart


With revenues restricted, this could appear a bad time to invest in new technology. Yet suppliers are keen to offer more advanced models with smart technology to secure the contracts that are still on offer, as well as putting themselves in a stronger position when the market does recover.


Completely unmanned, fully remote, automatic machines are becoming more common, while 3D scanning of stockpiles to better manage inventories, stacking and reclaiming is becoming increasingly popular. For instance, Vale’s
stacker reclaimers at its terminal at Teluk Rubiah in Malaysia are operated automatically, with the gantry and bucket wheel put into position by GPS, based on the information provided by scans of the stockpiles. Elsewhere, Metso is getting technological improvements and product renewals ready for anticipated renewed demand from the mining sector.


Bedeschi’s Marcato said: “From the point of view of software, smart technology is able to help with the provision of information and the mapping of stockpiles for stacking and reclaiming, in addition to the operation of machines themselves.” Yet the general view is that the level of competition in this market is not particularly intense, partly because there are few companies capable of providing this level of high technology.


Wang Chang of DHHI commented: “We have completed a project in Australia, where the working yard is far away from where those operating the machinery live. DHHI does not have the most advanced technology – Siemens and ABB are the best companies in the new technology concerning stacker and reclaimers. But, to tell the truth, compared with other sectors, such as cars or airplanes, the smart technology in stackers and reclaimers still has a long way to go. I have confidence that one day the intelligent stacker and reclaimer will become true.”

 

The recovery in demand for stackers and reclaimers will depend in large part on how fast mining sector demand recovers, which, in large part, will rely on more rapid global economic growth. The price of iron ore remains stubbornly low, and demand seems unlikely to recover in the short term, but the picture in the coal industry is more optimistic.

 

Even as recently as January, doubt was being cast on the planned expansion of Mozambique’s coal export capacity, while Westshore Terminals in Vancouver was downgrading its projected exports from 30 Mtpa to 24 Mtpa because of the apparently relentless slump in coal prices during 2015.


Westshore had ordered three new stacker reclaimers but has the right, until the end of this year, to cancel its option on one of them. It will be interesting to see if it exercises this right. However, renewed demand from India and China has boosted coking coal prices this year, from US$75/t in January to US$140/t by the end of August. If sustained, this could generate more sales of new machines, but a broader recovery is required, if the industry is to fully exit the recent slump.

 

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