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Tamarack Mining Supply Index: April 2023
Index Movement
The Tamarack Mining Supply Mining Supply Index dips below 50 for the first time since September 2022.
Industrial suppliers are feeling the pinch of a rocky economic outlook and miners are in a leverage position as demand for mining stays strong compared to other sectors.
Now is a good time for miners to consider leveraging their volume by locking in longer contacts in strategic categories and utilizing group buying as a quick-win strategy for securing price and supply in an uncertain economic market.
Tailwinds
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Apart from global economic concerns, the mining industry is still a bright spot in the economy with a relentless quest for materials to support an energy transition
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Perenti delivered good news to investors via contract extensions in Canada and Australia¹
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Wajax announced 2022 fourth quarter and annual results, announcing record revenue, strong results from parts and repair services, robust prices and strong demand²
¹ Perentigroup.com
² Wajax.com
³ Primestonecapital.news
⁴ Reuters: Shell Recommends Shareholders Reject Climate Activist Resolution
Headwinds
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Pressure continues to mount for Brenntag; now facing two activist investor groups demanding the company split its essentials and specialties businesses to improve profitability and address cost efficiencies, activist investors are also now demanding a seat on the board³
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Oil and gas companies like Shell are bracing for profit challenges as economic uncertainty is signaling reduced demand
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The oil & gas industry is also facing pressure from climate activist shareholders seeking more stringent and rapid emissions cuts by 2030⁴
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Economic uncertainty and fear of a slowing economy is taking a toll across categories such as mobile and equipment and fixed asset, categories that have tended to have a robust performance in the Index
Cost Tracking Models: April 2023
Each model represents an estimated "should cost" based on its constituent components and inputs (i.e., commodity, labour, freight, etc). Sample cost models based on delivery to specific locations. Please enquire with Tamarack to learn more.
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