Explosives Market Analysis

Fluctuations in raw materials prices and the skyrocketing crude oil prices will act as the hostile forces that will fuel the procurement expenditure of buyers in the explosives market. These factors will challenge will the prospects of spend growth in the explosives market that is expected to touch a value of over USD 8 billion through 2023. This spend growth will be attributed to the fortification of the global defense expenditure which is currently a pressing requirement owing to the increasing terrorist attacks and threats. The rapid increase in the mining activities will also contribute to the demand for mining explosives that will ultimately contribute towards the spend growth of the explosives market.

Considering the inflating explosives price, it is recommended that category managers engage with suppliers that have domain expertise and provide technical consultations for determining the type and quantity of explosives required for the kind of mining activities being carried out by the former. This will help buyers to improve their blasting precision while avoiding ad-hoc procurement in the explosives market.

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Buyers to Expect an Excess Procurement Spend Owing to these Explosives Price Trends

According to forecasts, the explosives prices will grow at a rapid rate during the forecast period owing to different factors that are typical of the geographies. Lack of insights and understanding of their impacts on the explosives price will trigger an uncontrolled procurement spend incurred by buyers in the market. An increase in the price of ammonium nitrate that is one of the key raw materials, compliance costs will serve as some of the chief spend accelerators in the explosives market.

• The supply shortage of natural gas will have a rippling effect on the explosives market from a price perspective. Lack of natural gas from which ammonia is synthesized will increase the price of ammonium nitrate that is one of the key raw materials. As a result, this will add to the supplier's OPEX which will have an inflationary impact on the explosives price.
   
• The rise in crude oil prices will not only increase the prices of raw materials derived from it but also will propel the logistics costs incurred by suppliers. This will drive the explosives price to a significant extent during the forecast period.
   
• The compliance cost is expected to rise during the forecast period due to the increasing stringency of regulatory norms governing the explosives market.

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Key Explosives Supplier Selection Criteria

Factors such as difficulty in product portfolio expansion owing to stringent regulations, extreme dynamism in raw material prices, hazardous nature of the product, among others are some of the key procurement challenges that will be faced in the explosives market. In view of these, this procurement intelligence report focuses on explosives supplier relationship management objectives that will enable buyers to address the potential procurement challenges while fostering a beneficial two-way relationship with suppliers.

Engagement with suppliers having multiple raw material vendors- Buyers are advised to partner with suppliers who are engaged with multiple raw material vendors worldwide. This helps suppliers in eliminating risks such as interruptions in supply due to accidents at the workplace, natural disasters, and logistics issues associated with complete reliability on a single vendor for the procurement of raw materials. Backward integrated suppliers can help buyers minimize the impact of explosives price volatility while also adhere to the delivery timelines.

Engage with suppliers that provide consultation and support services- Handling explosives is a hazardous affair resulting in numerous accidents and financial losses for buyers. In view of this challenge, it is imperative that buyers engage with explosives suppliers that not only provide explosives, but also services such as technical and safety training, delivery of explosives to blast sites, and all-encompassing rock-on-ground services. Engaging with such suppliers can help buyers to avoid engagements with multiple suppliers for the above-mentioned services. As handling and operating explosives are hazardous and require domain expertise, suppliers are best suited to take on such requirements of buyers.

Criteria to select suppliers in this dynamic explosives market is subject to change based on the day-to-day market outlook. Get a free demo of our procurement platform to gain immediate access to real-time insights to the changing explosives suppliers selection criteria.

Top Spending Regions in the Explosives Market

According to the observations, APAC will the highest contributor towards the spend growth in the explosives market. This contribution will be attributed to the rapid urbanization in growing economies such as India and China, leading to the growth of the construction industry. As explosives are extensively used for blasting activities in the construction industry during infrastructure construction, such as railways and roadways, growth in such activities leads to an increased demand for explosives in the region. The prominence of the natural gas industry in the US due to the discovery of large shale oil and gas reserves will contribute towards the demand growth of the explosives market in North America.

Insights Offered in this Explosives Market Report

• Global and regional spend potential for the explosives market for the period of 2018-2023
• Explosives supplier relationship management insights and supplier cost structure
• Explosives market share in the US
• Explosives suppliers market in the US
• Procurement best practices in the explosives market
• Explosives price, trends and forecasts
• Cost-saving opportunities in the explosives market
• Insights into the potential explosives procurement challenges