An Overview of the Crushing Market

Oct. 22, 2019

As 2019 winds down and organizations across the industry finalize their budgets for the upcoming year, it’s worthwhile to reflect on the state of the crushing sector as a whole.

What is the outlook on the market for crushing? How is it changing? What will the future look like?

Answering these questions is helpful in evaluating both current and past performance, as well as preparing for the future. No matter what subsection of the crushing market your organization is in the overall demand on the industry will impact you in the coming years and play a role in influencing your decision-making.

Analyzing the market is important. Here’s a general overview on the crushing market over the past 10 years, the current day, and 10 years into the future.

 

The Past 10 Years: Recovery from the Recession

Like a vast majority of industries, the crushing industry was markedly impacted by the recession in 2008. Prior to this event, demand had been more localized. When projects called for materials, organizations would source it locally, often working with a nearby quarry to get what was needed and spending less time and research on securing the absolute lowest price.

When the recession hit projects were forced to become lean.

Many aggregators were sitting on vast supplies of materials; when budgets were tightened, they were unable to move their products, resulting in surpluses that outweighed demand. To compensate, aggregators cut product prices. Projects became predicated on low-cost products. As a consequence of this cycle the industry became much more cost driven.

However, as the economy recovered, prices rebounded with it. The framework for decision-making is still far more cost-based than it was prior to 2008, but the past decade has been a story of continued growth.

 

The Present: How Demand Fluctuates

Today, demand for crushing fluctuates seasonally. At a high level, demand is greatly impacted by state highway projects.

There are typically numerous projects early in the year when the cold weather breaks (generally in April and May). In the latter part of the year, there’s another flurry of activity as final (often smaller) projects are implemented before winter shuts down crushing.

On local levels, crushing fluctuates depending on the climate and on whatever materials are locally available. The season is longer in the south, for example, while in upstate New York things begin to shut down by October because of harsher weather.

 

The Next 10 Years: Why Continued Growth Is Likely

Market demand for crushing seems likely to continue to grow moving forward. There are two driving factors for this:

First, an increasing number of highways will require total rebuilds thus creating a need for more material. The American Society of Civil Engineers has determined that one in four of the country’s bridges is more than 50 years old and one in five miles of highway is in poor condition. Fixing these issues will call for crushing work.

Second, existing quarry sites are beginning to exhaust their supplies, meaning that an increase in greenfield sites is likely. This may serve to impact the supply and demand curves. It will also clearly impact the subsectors of the industry that facilitate greenfield site development – parts suppliers, plant designers, contracted crushers, and more.

The unknown variable in the market is governmental action, which plays an outsized role in the industry as it impacts state transportation budgets. Things in that arena have moved slowly 

The previous highway bill was a quick-fix effort titled the FAST act that did little more than kick the can on a federal infrastructure approach, offering funding through 2020.

Fortunately, there is change on the horizon. A new transportation bill, titled America’s Transportation Infrastructure Act of 2019, aims to boost spending by authorizing a record $287 billion from the Highway Trust Fund over the next five years. It passed unanimously through a bipartisan committee but hasn’t yet hit the senate floor. While things look promising, the future remains uncertain 

Still, the combination of all these factors certainly points toward a favorable outlook for the crushing industry.

 

Crushing Is Valuable

The work that the crushing industry does helps to build valuable things including highways, bridges, and public spaces along with crushed material is vital. These are the projects that our country runs on and at Mellott Company, we’re honored and proud to contribute to this market.

From 2008 up to our present day, the crushing industry has come a long way. And as we head into 2020, the future looks bright.

As you prepare for the future of the crushing industry, be sure to get in touch with us for any crushing demands – including contract crushing, portable crushing, rock crusher parts, equipment, performance systems, and more.

At Mellott Company, we’re the leading innovator in the international rock crushing and screening business. We partner with the aggregate, slag, construction, and environmental industries as a true full-service provider and support your operations with our expertise and veteran leadership. The aggregate industry is continuing to grow, why don’t you consider growing with us by your side?

If you have crushing needs, let’s talk.

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