Prices are forecast to keep growing in the three years to 2016 as demand continues to rise because of economic growth and increases in input prices
Los Angeles, CA (PRWEB) April 25, 2014
Explosives have a buyer power score of 2.5 out of 5, where a score of 5 demonstrates the highest buyer power. “The buyer power score in this market is typically low, primarily due to the pricing model and necessity for the market's products,” says IBISWorld procurement analyst Pierre Dessertenne. Buyers face limited leverage in negotiations due to the low differentiation in market products and prices between suppliers. Major suppliers in this market include Austin Powder, Orica Limited, Incitec Pivot Limited and Maxam North America Inc.
Explosives are required to perform identically if they are a comparable product regardless of the buyer, resulting in very similar manufacturing processes, cost structures and, ultimately, prices. “The price of explosive materials is mostly dependent on the cost of the manufacturing process and the price of chemical inputs necessary for production,” says Dessertenne. The rising prices of the raw materials that are required to make chemicals and the prices of the chemicals themselves have contributed to supplier's increasing production costs, and these price increases have also been passed down to buyers.
Demand for explosive materials is estimated to increase in the three years to 2013, mainly because the copper, oil, iron and coal mining industries have had greater production needs as the economy has recovered. The increased activity in these industries has helped raise market prices and the production of explosive materials, especially blasting agents, which are an essential part of mining operations.
Explosive materials tend to have a limited shelf life, especially the most commonly used variations; therefore, buying large quantities of explosive materials to avoid future price increases is not really an option. As economic growth increases during the three years to 2016, prices are expected to increase because demand from raw materials industries is expected to rise.
For more information, visit IBISWorld’s Explosives procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of explosives. Explosives are reactive substances that contain a great amount of potential energy that creates a powerful, destructive force when released. This report focuses on the commercial use of blasting agents and explosives, along with a quick overview of blasting services. It does not cover the use of explosives for defense purposes.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.