TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Heavy equipment sales take a dive as commodity prices plunge
Diversifying sales to the construction sector may help heavy equipment firms stay afloat.
Change Size
Several pieces of heavy equipment owned by PT Berau Coal conduct coal mining activities on March 4, 2022, at the Binungan mine in East Kalimantan. (JP/Indra Harsaputra)
I
ndustry players reported a 10.8-percent drop in heavy equipment sales last year, mainly because of lower demand from the mining sector amid a drop in commodity prices. This year, businesses expect the trend to persist with the possibility of an even deeper plunge.
The Indonesia Heavy Equipment Sole Agent Association (PAABI) stated that only 18,123 units of heavy equipment were sold last year, compared to 20,300 units sold in the previous year.
According to PAABI chairman Etot Listyono, the decrease in purchases in the mining sector was in line with a slump in coal prices over the past year, with similar trends also seen with other minerals.
The coal price dropped by over 62 percent to US$141.8 per tonne last year from $379 per tonne in the previous year, while the nickel price fell by over 43 percent to $16,500 per tonne in the same period, according to Statistics Indonesia (BPS) data.
Construction companies, a major market for heavy equipment, have inclined to ‘wait and see’ at least until the general election when future policies will become clearer.
As a result, the association has set a conservative sales target of 14,000 units this year, representing a 25 percent decrease from last year’s figure.
“I don’t think the sales can return to the 2022 level. This year, most of the demand from mining companies will only be for refreshment [of their current inventory], while purchases from the forestry and agroindustry sectors may remain stable,” Etot said on Jan. 31, as quoted by Bisnis.
