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Released February 10, 2015 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Coming off consecutive years where the annual value of construction starts in the North American Metals & Minerals Industry exceeded $32 billion, 2015 is lining up to be an interesting year for project spending, as the industry is facing a mixed bag of drivers that both support and deter project development.
For more information, see February 4, 2015, article - U.S. Metals & Minerals Industry Began Construction on $32.7 Billion of Projects in 2014.
In the U.S., improving economic, labor, and construction activity is boosting project development, as demand for consumables and construction materials has improved. A strong automotive industry is driving demand for light metals, including aluminum. As a result, aluminum rolling mills and foundries are faring well.
However, continued low commodity prices (oil and metals) and the subsequent downturn in oil and gas exploration and drilling development will have a negative impact on the market in 2015. A number of steel companies, including United States Steel Corporation (NYSE:X) (U.S. Steel) (Pittsburgh, Pennsylvania) and Tenaris S.A. (NYSE:TS) (Luxembourg, Luxembourg), already have announced layoffs and cut back capital expenditures in 2015. Companies that supply products, like oil country tubular goods (OCTG), to the oil & gas market are citing its slowdown as the reason for the cuts.
Tejas Tubular Products Incorporated (Houston, Texas) is the latest victim, putting plans on hold for a $100 million grassroot steel tubular products mill in Norfolk, Nebraska. The project was supposed to start construction this quarter.
Currently, Industrial Info is tracking 796 Metals & Minerals Industry projects in North America, totaling $57.14 billion, that are scheduled to begin construction in 2015. This includes 141 projects totaling $29.1 billion in Canada, 477 projects totaling $19 billion in the U.S. and 169 projects totaling $8.6 billion in Mexico.
This is significantly less than the $99.4 billion that Industrial Info was tracking to kick off in 2014 at this time last year. The decline in the value of planned construction starts can be attributed to resource companies pushing out the construction starts on big-ticket grassroot projects, especially in the mining sector.
This is easily seen in Canada, the No. 1 country worldwide for mining project development. Expect to see fewer major projects starts this year in Canada's oil sands and mining sectors, resulting in an 18% to 20% decline in the value of projects starting construction when compared with last year.
In the U.S., positive activity in the aluminum and cement sectors will even out declines in energy-supporting sectors, resulting in flat to slightly negative growth in the value of project starts.
Mexico will experience flat growth, as declines in mining are counterbalanced by an uptick in steel projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
For more information, see February 4, 2015, article - U.S. Metals & Minerals Industry Began Construction on $32.7 Billion of Projects in 2014.
In the U.S., improving economic, labor, and construction activity is boosting project development, as demand for consumables and construction materials has improved. A strong automotive industry is driving demand for light metals, including aluminum. As a result, aluminum rolling mills and foundries are faring well.
However, continued low commodity prices (oil and metals) and the subsequent downturn in oil and gas exploration and drilling development will have a negative impact on the market in 2015. A number of steel companies, including United States Steel Corporation (NYSE:X) (U.S. Steel) (Pittsburgh, Pennsylvania) and Tenaris S.A. (NYSE:TS) (Luxembourg, Luxembourg), already have announced layoffs and cut back capital expenditures in 2015. Companies that supply products, like oil country tubular goods (OCTG), to the oil & gas market are citing its slowdown as the reason for the cuts.
Tejas Tubular Products Incorporated (Houston, Texas) is the latest victim, putting plans on hold for a $100 million grassroot steel tubular products mill in Norfolk, Nebraska. The project was supposed to start construction this quarter.
Currently, Industrial Info is tracking 796 Metals & Minerals Industry projects in North America, totaling $57.14 billion, that are scheduled to begin construction in 2015. This includes 141 projects totaling $29.1 billion in Canada, 477 projects totaling $19 billion in the U.S. and 169 projects totaling $8.6 billion in Mexico.
This is significantly less than the $99.4 billion that Industrial Info was tracking to kick off in 2014 at this time last year. The decline in the value of planned construction starts can be attributed to resource companies pushing out the construction starts on big-ticket grassroot projects, especially in the mining sector.
This is easily seen in Canada, the No. 1 country worldwide for mining project development. Expect to see fewer major projects starts this year in Canada's oil sands and mining sectors, resulting in an 18% to 20% decline in the value of projects starting construction when compared with last year.
In the U.S., positive activity in the aluminum and cement sectors will even out declines in energy-supporting sectors, resulting in flat to slightly negative growth in the value of project starts.
Mexico will experience flat growth, as declines in mining are counterbalanced by an uptick in steel projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
