China mining slump batters heavy-equipment makers
Producers of building and mining equipment steel themselves in the face of China's downturn
Xu Biao could sit in his office waiting for orders to roll in during a mainland building boom two years ago. Now, he is on the road trying to drum up business.
"Life is difficult," Xu, a sales manager at Maanshan Fangyuan Slewing Ring, said. "Every client is cutting production."
Maanshan Ring supplies parts to Sany Heavy Industry, XCMG Construction Machinery and other equipment makers in competition with some big rivals.
Caterpillar, which sources 25 per cent of sales in Asia, Komatsu and Sany have all slashed output in the world's biggest construction-equipment market this year as a demand slump caused by slower economic growth has spread from building to mining. Sales of large excavators, mainly used by miners, last month slid the most since January 2009, contributing to the 15th successive decline in the overall market.
"The market is just getting worse," Wang Shuangming, an analyst with consultancy China Construction Machinery Business Online, said. "It doesn't matter if you're a foreign or domestic producer, everybody is in the same boat."
Excavator sales fell 24 per cent from a year earlier in July to 5,827, according to China Construction Machinery Association data revealed by Nomura Holdings. Sales have dropped year on year every month since May last year after a government clampdown on real estate triggered a building slowdown. Construction of railways also slowed following a deadly crash in July last year.