Industrial Explosives Market Analysis

Market Overview

An explosive is a reactive chemical substance, which contains a significant amount of potential energy that can produce an explosion if and when released suddenly. It is accompanied by the production of heat, light, pressure, and sound. Industrial explosives are high hazard blasting explosives mainly used in quarrying, mining, and construction industry. The choice of industrial explosives for a typical task depends upon major parameters including detonation pressure, the velocity of detonation, density, detonation pressure, water resistance, storage life, and sensitivity. Industrial explosives are classified into following key types depending on their cap sensitivity namely high explosives and blasting agents.

The global industrial explosives market is estimated to account for US$ 18,786.74 Mn in terms of value by the end of 2028.

Market Dynamic- Drivers

1. Rapid growth of coal-fired power generation is expected to drive growth of the global industrial explosive market during the forecast period

Rising urbanization has led to increasing demand for power. Government authorities need to meet the increasing energy demand with rising population. According to Coherent Market Insights’ analysis, global power generation is expected to witness a significant growth of 19.5% during 2012-2020. According to the U.S. Energy Information Administration (EIA), by 2040, the power generated using coal is expected to account for nearly 29% share in overall generated power, witnessing a decline of nearly 11% in its share between 2012 and 2040. Although there has been effort taken regarding renewable and cleaner energy sources for power generation, coal-fired power generation remains a major source of energy. Therefore, these factors are expected to drive growth of the global industrial explosive market during the forecast period.

2. Tapping rich mineral resources is to boost economic growth is expected to propel the global industrial explosives market growth over the forecast period

Mining activities account for a major share of GDP in several emerging economies such as China, India, Brazil, Mozambique, and Mexico. Governments of the aforementioned countries are focused on unexplored and untapped investment opportunities for mining of mineral resources in order to drive economic growth. Moreover, countries in Central and Western Africa are expected to witness increase in mining output during the forecast period. For instance, in January 2015, the Government of Peru invested around US$ 62 Bn on mining projects to increase the extraction capacity of minerals including zinc, copper, and gold. Therefore, these factors are expected to propel the global industrial explosive market growth over the forecast period.

Statistics:

Asia-Pacific held dominant position in the global passive components market in 2020, accounting for 44.8% share in terms of value, followed by North America, Europe and Rest of the World respectively.

Industrial Explosives Market Report Coverage

Report Coverage	Details
Base Year:	2020	Market Size in 2020:	US$ 11,623.20 Mn
Historical Data for:	2016 to 2019	Forecast Period:	2020 to 2027
Forecast Period 2020 to 2028 CAGR:	6.2%	2028 Value Projection:	US$ 18,786.74 Mn
Geographies covered:	North America: U.S., Canada Latin America: Brazil, Argentina, Mexico, Rest of Latin America Europe: Germany, U.K., Spain, France, Italy, Russia, Rest of Europe Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, Rest of Asia Pacific Middle East: GCC Countries, Israel, Rest of Middle East Africa: South Africa, North Africa, Central Africa
Segments covered:	By Type: High Explosives, Blasting Agents. By End-use Industry: Metal Mining, Non-Metal Mining, Quarrying, Construction, Others.
Companies covered:	Orica Limited, Irish Industrial Explosives Limited, Dyno Nobel Pty Limited/ Incitec Pivot Ltd., NOF Corporation, AEL Mining Services Ltd. / AECI Group, EURENCO, Enaex S.A., Austin Powder Holdings Company, Maxamcorp Holding S.L., and Exsa S.A.
Growth Drivers:	Rapid growth of coal-fired power generation Tapping rich mineral resources
Restraints & Challenges:	Cyclical nature of global mining industry Stringent government regulations

Figure 1: Global Industrial Explosives Market Share (%), in terms of Value, By Region, 2020

Market Dynamics- Restraint

1. Stringent government regulations are expected to hamper the global industrial explosive market growth over the forecast period

Industrial explosives are made of hazardous chemicals and can release toxic gases such as carbon dioxide and nitrogen oxide. Governments of many countries have imposed stringent regulations on the use and storage of industrial explosives. For instance, in 2014, the Government of Peru government stated that mineral exploration companies need to make an Environmental Impact Declaration (DIA) thereby specifying the number of explosives being used for seismic generation and mining, and their tentative impact on the environment. Therefore, these factors are expected to drive growth of the global industrial explosives market growth over the forecast period.

2. Cyclical nature of global mining industry is expected to restrain growth of the global industrial explosives market during the forecast period

Global mining industry is cyclic in nature witnessing bust and boom on average seven to nine years. The global mining industry growth is directly proportional to global economic growth. Emerging economies such as China have witnessed slower economic growth in the recent past. Furthermore, in many countries commodity prices have witnessed a decline due to low demand for key minerals. Hence, such characters are expected to restrain growth of the global industrial explosives market during the forecast period.

Market Opportunities

1. Research and development activities can present lucrative growth opportunities in the global industrial explosives market

Key companies are focused on research and development activities, in order to expand the product portfolio. For instance, in 2016, Orica Limited introduced the Vistis Bulk System, a high energy bulk explosive, for application in hard rock metal mines in Australia. In 2013, AEL Mining Services Ltd. launched a pneumatic-powered stope pump to convert chemicals into explosives at the blast site. Furthermore, in 2014, Maxam launched an explosive facility in Mauritania, North Africa to facilitate explosive solutions for the Tasiast gold mine.

2. Merger and acquisition activities among market players can provide major business in the global industrial explosives market

Major players in the market are involved in merger and acquisition activities, in order to gain a significant advantage in the market. For instance, in 2011, Orica Ltd. acquired Explosives Limited (XL), a U.S.-based mining and explosives company, in order to capitalize on expected growth in the U.S. explosives market. In 2014, Enaex S.A. acquired Chemtrade, a Peru-based explosives company, to expand its footprint in the region.

Figure 2: Global Industrial Explosives Market Value (US$ Mn), 2017 - 2028

The global industrial explosives market was valued at US$ 11,623.20 Mn in 2020 and is forecast to reach a value of US$ 18,786.74 Mn by 2028 at a CAGR of 6.2% between 2021 and 2028.

Market Trends

1. Capacity expansion and raw material supply security are key trends

The demand for industrial explosives has increased significantly in the recent past. As a result of this, manufacturers are focused on strategically expanding their capacities and operations. For instance, in 2016, Orica Limited and Yara International ASA established an ammonium nitrate manufacturing plant in Western Australia. The production capacity of the plant is to produce 330,000 tons of ammonium nitrate (AN) per annum. In 2015, Maxam established a production facility for bulk emulsion solutions in Ogdensburg, New York. Moreover, in 2013, the Dyno Nobel Pty Limited established a new production plant for ammonia in Waggaman, Louisiana with an 800,000 metric tons per annum capacity.

2. Novel product offerings and mining solutions is another key trend

Key manufactures of industrial explosives are focusing on product differentiation through innovation by means of investments in Research & Development, value-added product launches, and by exploring novel applications. Major players are focusing on offering high energy explosives, rock fragmentation explosives, and explosives for underwater applications. For instance, in 2014, EXSA S.A. launched an innovative and cost-effective technology, Quantex, which reportedly reduces the cost of rock fragmentation in open-pit mining and construction activities.

Global Industrial Explosives Market- Impact of Coronavirus (Covid-19) Pandemic

Due to Covid-19 pandemic, many industries witnessed significant shift in their business. Due to disruption in the supply chain, metal manufacturers faced difficulties in sourcing of raw material, build trucks and ships that transport goods to consumers. The metal industries have cut discretionary and capital spending in order to support manufacturing operations. Disruptions lead to the huge financial crisis in the industries. For instance, according to World Steel Association data, The US produced 7.2 Mt of crude steel in March 2020, a decrease of 6.0% compared to March 2019. Furthermore, Russia estimates 5.9 Mt of crude steel production in March 2020, down 4.4% on March 2019. Due to supply chain disruptions and reduced demand, the market has negatively impacted.

Value Chain Analysis

Competitive Section

Major companies operating in the global industrial explosives market are Orica Limited, Irish Industrial Explosives Limited, Dyno Nobel Pty Limited/ Incitec Pivot Ltd., NOF Corporation, AEL Mining Services Ltd. / AECI Group, EURENCO, Enaex S.A., Austin Powder Holdings Company, Maxamcorp Holding S.L., and Exsa S.A.

Key Developments

1. Major companies are focused on partnership and collaboration, in order to expand the market presence. For instance, in November 2019, Orica Limited patterned with Epiroc Rock Drills AB to develop a semi-automated explosives delivery system.
2. Key players are involved in partnership and collaboration, in order to gain a competitive edge in the market. For instance, in June 2018, EURENCO partnered with Solar Industries India Limited for the supply of explosives, propellants, and transfer of technology project.