Drilling Tools Procurement Category Market Research Report Now Available from IBISWorld
Los Angeles, CA (PRWEB) April 01, 2014 -- Drilling tools have a buyer power score of 3.2 out of 5. This score reflects the volatility of external drivers and input prices, indicating that suppliers can be somewhat flexible with their prices. This translates to moderate negotiating power for buyers. These factors are underlined by the low market structure score, which measures the availability of substitutes, market share concentration and switching costs. Demand for drilling tools and accessories is heavily dependent on industrial production, average annual rainfall and government consumption and investment. “The recent global economic crisis sent a number of gas exploration, oil and water well drilling projects on a precipitous decline, weakening demand for drilling tools and related equipment,” says IBISWorld business research analyst Agiimaa Kruchkin. Similarly, government agencies cut their spending on soil sampling and evaluation projects, hampering demand for drilling tools, among other tools and machinery.
“Nevertheless, the ongoing economic rebound has been fueling demand for drilling tools and accessories from major downstream markets, including oil drilling and gas exploration, water well drilling and the government,” says Kruchkin. As a result the price of the primary input, steel, grew in the three years to 2013. Rising steel prices caused prices for drilling tools and related products to grow in the three years to 2013, eroding buyer negotiating power.
Volatile steel prices and fluctuating demand from downstream markets create an unpredictable purchasing environment that weakens buyer power. Suppliers of drilling tools and accessories have moderate profitability, and the volatility of primary inputs, like steel, makes margins unstable. As a result, prices for tools are often in flux as suppliers try to maintain profitability. Suppliers' challenge to protect returns severely limits their price flexibility, although bulk purchases and supply agreements offer buyers some potential cost savings. Volume discounts can reduce per-unit prices, while supply agreements can shield buyers from future price spikes. Major vendors include Atlas Copco, Schlumberger Company, Sandvik AB and Halliburton Company. For more information, visit IBISWorld’s Drilling Tools procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of drilling tools. Drilling tools include a variety of components and parts, such as drill collars, coring equipment, drill pipes, blowout preventers, thrusters, drilling jars, hole openers, hole reamers, drilling subs and gauge rings, among other related accessories and equipment. Drilling tools are supplied by machinery manufacturers, tool wholesalers and retail stores. This report excludes directional drilling tools, casing-while-drilling tools, handheld drilling tools and industrial drilling tools.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
About IBISWorld Inc.
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.
Gavin Smith, IBISWorld Inc., +1 (310) 866-5042, [email protected]
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