Melbourne, Australia (PRWEB) June 05, 2014
In the past five years, the Metal and Mineral Wholesaling industry has benefited from the mining investment boom, strong foreign demand and stable domestic growth. Demand from engineering construction for basic metal products (such as structural sections) has been particularly strong, reflecting investment in resource projects and associated infrastructure. Firms supplying other sectors, including automotive manufacturers and the residential housing market, have fared less well. Industry revenue is estimated to increase at an annualised 3.0% over the five years through 2013-14, driven by the strength of the mining investment boom and high foreign demand. However, growth has been constrained by the ongoing trend of wholesale bypass. IBISWorld industry analyst Alen Allday states, “Miners and manufacturers are increasingly dealing directly with their customers, but the remote location of many resource projects allows metal wholesalers to play a key role in supplying engineering construction firms.” Industry revenue surged in 2011-12 and continued growing strongly in 2012-13. In 2013-14, industry revenue is forecast to increase by 1.2% to reach $30.2 billion.
The gains made over the past five years are forecast to continue at a slightly slower rate over the next five. According to Allday, “The mining investment boom is tailing off as resource projects move from the construction phase into the production phase. As a result, opportunities for metal wholesalers to supply products into engineering construction will decline.” At the same time, wholesale bypass by major mining houses means that new opportunities to act as a mineral ore or coal wholesaler will be limited. Automotive production will continue to offer fewer opportunities to metal wholesalers. Despite slower growth in domestic sales, foreign demand is forecast to increase strongly. Overall, industry revenue is expected to increase. A general upward trend in dwelling construction activity and a pick-up in non-dwelling building construction are expected to be bright spots for the industry. Firms servicing these markets will be relatively well placed over the next five years.
The Metal and Mineral Wholesaling industry operates with a low level of market share concentration. Industry concentration has increased in the past five years with CITIC Resources Australia Pty Ltd and Mitsui-Itochu Iron Pty Ltd (the industry’s two major players) significantly increasing operations and market share. The low industry concentration level reflects both the diverse range of products supplied by firms in this industry and the scope available for small participants to service specific geographic markets, such as provincial centres or small towns. A large number of companies service niche markets and regions, while others have exclusive import and export contracts with foreign buyers and domestic companies. For more information, visit IBISWorld’s Metal and Mineral Wholesaling report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry comprises firms that wholesale a range of mineral and metal products. Key items include coal and coke, pig iron, ingot steel and semi-fabricated products of iron or steel (sheet, strip, bars, rods, sections, structural steel or tubes). Firms may also wholesale metal waste or scrap.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.