An explosive refers to a reactive substance that is comprised of a vast amount of potential energy that can produce a massive explosion if released suddenly. It is usually accompanied by light, sound, and pressure. The process of initiation of explosives is termed as detonation. One unit of explosives when initiated can expand up to 1,000 units within several milliseconds creating high pressure in the blasthole and gaining temperatures ranging from 1,500°C to 4,000°C and an approximate velocity of 2,500–8,000 meters/second. Explosives are categorized on the basis of speed of their detonation. Moreover, another parameter that classifies them is the intensity of detonator used in imitation of the explosive. Industrial explosive is used in various application areas such as mining, construction, and more.
The Latin America industrial explosives market is estimated to account for US$ 1,888.38 Mn in terms of value by the end of 2027.
Market Dynamics- Drivers
Increasing demand for metals, non-metals, and stones in Latin America has increased mining activities thereby boosting the overall demand for industrial explosives. Growing inclination of foreign investors in the Latin America mining industry has led to a boost in the demand for explosives such as blasting agents and high explosives in the region. According to Coherent Market Insights’ analysis, Investments in the mining sector in Latin America had risen by over 50% from 2010 to 2014. According to the same source, Total investment in the mining sector in Mexico reached US$ 14.6 Bn collectively in both 2012 and 2013. Hence, these factors are expected to drive growth of the Latin America industrial explosives market in the near future.
The demand for robust public transport facilities has increased, which includes roadways and railways thereby resulting in intensive tunneling and road development projects being initiated in relatively developed countries of Latin America such as Brazil and Mexico. This, in turn, is expected to propel the Latin America industrial explosives market growth over the forecast period. According to Coherent Market Insights’ analysis, investment in construction and infrastructural activities in Brazil rose from 2.5% of GDP to 4% of GDP from 2011 to 2015.
Statistics:
Chile held dominant position in the Latin America industrial explosives market in 2019, accounting for 28.9% share in terms of value, followed by Peru, Colombia, Brazil, and Mexico respectively
Figure 1: Latin America Industrial Explosives Market Share (%), in terms of Value, By Country, 2019
Market Dynamics- Restraints
Various raw materials are used in the production of explosives including ammonium nitrate. Such materials have witnessed a rapid hike in terms of prices in the recent past due to increasing demand for explosives in mining, construction, and quarrying activities. Moreover, natural gas being a primary material used in the production of ammonia, a raw material further used in the production of explosives, which is witnessing high prices hikes. Hence, these factors are expected to hinder the Latin America industrial explosives market growth in the near future. For instance, in November 2015, prices of ammonium nitrate rose by 4%. Moreover, the prices of natural gas rose by 75% in 2012.
Explosives lead to adverse effects on the environment as it releases toxic gases such as carbon dioxide and nitrogen oxide during explosions and dangerous hazards related to the storage of such unstable explosives. As a result of this, governments of various countries in Latin America are enforcing strict regulatory regulations on the use of storage of industrial explosives, which in turn, is expected to hamper the Latin America industrial explosives market growth during the forecast period.
Market Opportunities
Construction activities in Latin America region have increased massively in the recent past with rising construction of public infrastructure. According to the Association of Equipment Manufacturers (AEM), the regional construction industry is expected to witness a CAGR of 2.6% during the forecast period with Peru, Columbia, and Brazil holding leading position.
Blasting agents have witnessed massive demand in Latin America in mineral extractions and infrastructural projects. A blasting agent is a material or mixture that consists of fuel and oxidizer, which is intended for blasting. Many key players in the market can provide blasting agents and gain a competitive edge in the market.
Figure 2: Latin America Industrial Explosives Market Value (US$ Mn), 2016 - 2027
The Latin America industrial explosives market was valued at US$ 1,050.70Mn in 2019 and is forecast to reach a value of US$ 1,888.38 Mn by 2027 at a CAGR of 7.6% between 2020 and 2027.
Market Trends
Major companies involved in the market are focused on increasing the depth of underground mines, in order to extract more amount of minerals and are thus deploying a large amounts of explosives specially ANFO and bulk explosives. For instance, in April 2014, ‘KGHM Polska Mied?’ started a new project called ‘Deep Glogow’ for the extraction of copper and silver. The depth of the mine is 1,200 meters and is expected to yield minerals for a span of 40 years.
Majority of companies are more inclined towards the use of explosives for tunneling of roads and railway tracks instead of mechanical drilling. For instance, Orica, an Australian explosives manufacturer, offers over 15 denominations of explosives (ANFO, emulsions, etc.) to be used in tunneling projects.
Competitive Section
Major companies involved in the Latin America industrial explosives market are MAXAM, AEL Mining Services Ltd., EXSA SA, Enaex, Austin International, Orica Limited, Keltec Energies, Economic Explosives, IBP Co., Noble Explochem, Accurate Energetic Systems, LLC., and Detotec North America Inc.
Key Developments
An explosive refers to a reactive substance that is comprised of a vast amount of potential energy that can produce a massive explosion if released suddenly. There are three classes of namely low explosives, industrial explosives, and military explosives. Industrial explosives find applications in mining such as metal mining, quarrying, and non-metal mining and in construction such as tunneling and blasting older buildings for reconstructions. It is usually accompanied by light, sound, and pressure. The process of initiation of explosives is termed as detonation. One unit of explosives when initiated can expand up to 1,000 units within several milliseconds creating high pressure in the blasthole and gaining temperatures ranging from 1,500°C to 4,000°C and an approximate velocity of 2,500–8,000 meters/second. Major uses of explosives are in fireworks, mining, blasting rock masses for tunneling, construction activities, quarrying, hydroelectric power projects, military wars, mineral extraction, and the oil & gas industry, to name a few.
Market Dynamics
Latin America region is witness increase in number of mining activities in recent past owing to increase in demand of metal and non-metal components. Furthermore, region also witness growing inclination of foreign investors it led to a boost in the demand for explosives such as blasting agents and high explosives in the region. According to Coherent Market Insights’ analysis, Investments in the mining sector in Latin America had risen by over 50% from 2010 to 2014. According to the same source, Total investment in the mining sector in Mexico reached US$ 14.6 Bn collectively in both 2012 and 2013. Hence, these factors are expected to drive growth of the Latin America industrial explosives market in the near future.
Moreover, Latin America region mainly contributed by developing economies such as Brazil, Chile and many other. These countries are going through rapid infrastructure changes and investing heavily in infrastructure market during the forecast period. According to Coherent Market Insights’ analysis, investment in construction and infrastructural activities in Brazil rose from 2.5% of GDP to 4% of GDP from 2011 to 2015. Thus these factors are expected to drive the global market.
Market Taxonomy
This report segments the Latin America industrial explosives market on the basis of Explosive Type, End-use Industry, and Country.
On the basis of Explosive Type, Latin America industrial explosives market is segmented into Mining, Construction and Others.
On the basis of country, Latin America industrial explosives market is segmented into Chile, Peru, Brazil, Colombia, Mexico, Argentina and Rest of Latin America.
Key features of the study:
Detailed Segmentation:
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