After experiencing a downturn, rotary drilling rig sales saw substantial growth in 2017.
Data released by the Piling Machinery Branch of the China Construction Machinery Society shows that, looking at China's rotary drilling rig market sales in 2017, cumulative sales of rotary drilling rigs showed substantial growth. This is the first major annual sales growth for the rotary drilling rig industry since it fell into a downturn in 2011.
In fact, the rotary drilling rig industry reached its peak in 2010. At that time, benefiting from accelerated infrastructure investment and policy stimulus, annual rotary drilling rig sales set a record. But the good times did not last long; in 2011 the rotary drilling rig market fell into a slump, and this sluggish state continued through the first three quarters of 2016.
Construction machinery is mainly used for infrastructure and real estate investment and has strong cyclical characteristics. The sharp sales growth of rotary drilling rigs in 2017 was mainly due to two factors: first, the state began to intervene to phase out some old models, thereby accelerating demand for new machines; second, investment in infrastructure and real estate projects increased.
Based on data analysis, in 2018, consumption upgrading, infrastructure construction, replacement of 2010 vehicles, and overseas market demand brought by the Belt and Road Initiative will all keep the industry operating at a high level. However, analysis suggests that this explosive growth will not continue into 2018. Overall, 2018 will not show a sharp decline, but it will not grow too fast either; one important reason is that the real estate market is now cooling down.
From the perspective of enterprise development, the top three rotary drilling rig companies are currently Sany, XCMG Foundation, and Sunward Intelligent, which together account for nearly 60% of the entire rotary drilling rig market share. In the rotary drilling rig field, enterprises are developing relatively steadily, and rotary drilling rigs are also an area of stable competition.
With the continuous improvement of technological innovation, Chinese rotary drilling rig enterprises have also made relevant plans in this field. In the future, R&D costs for rotary drilling rigs will be further reduced, and vehicle consumption will also decline accordingly. But from the overall direction of development, the main breakthrough for China's rotary drilling rigs at present should be in technological innovation. Strengthening cooperation with foreign brands — this trend of joint ventures will bring a new round of reshuffling to rotary drilling rig enterprises.