BMI expects coal production to continue to decline due to weak thermal and metallurgical coal prices, significant coal stockpiles and competitively cheap natural gas.
"The declining coal sector, which accounts for nearly two-thirds of the U.S. mining industry value, will drag down mining industry value, which we forecast to contract by an average of 0.6 percent annually over 2017-2020. In absolute terms, we expect the U.S. mining industry value to stagnate, totaling $97.7 billion by 2020 compared to an estimated $98.2 billion in 2016," BMI said.
"We forecast U.S. coal production to maintain a steady decline, averaging a 2.5-percent contraction over 2017-2020. In terms of volume, we expect the U.S. to produce 625 million tons of coal in 2017 and only 588 million tons by 2020, compared to a peak of 1.1 billion tons in 2008," BMI said.
Meanwhile, U.S. copper production will edge up in the next few years as prices stabilize and as major miners cut costs and maintain output.
Conversely, the lead industry will remain bogged down by weak prices, tightening environmental regulations and increasing competition from recycled products.
Overall, the global mining industry's value and production growth outlook for 2017 gradually will improve over the course of the year as metal prices are likely to trend higher over the coming quarters, according to BMI.
Focus on costs
"Any production growth in the mining market will likely be met with large efficiency efforts on the part of the mining operators to keep costs low and protect working cash flow," Michelin said.
Given these expectations, Michelin said it has no plans to restart production this year at its Starr, S.C., giant earthmover tire plant, idled in late 2015 due to slowing global demand. The factory is one of three Michelin factories globally with capacity for 63-inch OTR radials.
"For the tire industry, OTR customers will be increasingly focused in 2017 and beyond on the total cost of ownership and how well any given provider helps them meet their own business goals," Michelin said.
"As seen over the last few years, miners will continue to manage down their tire inventories to a minimum while keeping just enough to meet their annual production plans as closely as possible," the tire maker said.
BMI predicts capital expenditures among mining companies will remain subdued until 2018 due to persistently low metal prices. Miners will continue to seek ways to further cut costs and pursue greater operational efficiencies.
"A large share of global miners will shift away from the diversification strategy they have been following and concentrate on increasing competitiveness in specific commodities in order to improve earnings.
"Major miners will also increasingly direct capex towards innovation through the use of technology and automation," BMI said.
Bridgestone expects the OE equipment market to be flat this year due to inventory buildup of new equipment coupled with a surplus of used equipment in the market.
Bridgestone has sufficient capacity at its factories for mining tires, so it doesn't plan to increase production for the time being, according to Mr. Cole.
Likewise, Yokohama, which produces OTR tires up to 51 inches in diameter, is looking at maintaining its output until the market improves, Mr. Easter said.
However, the tire maker is focusing on ramping up production of radial OTR tires vs. bias-ply.
"We're trying to build a lot of the products that are in demand now in the radial sizes. We're probably the best in the industry on the bias-ply side, but we're playing catch-up these last few years on the radials," Mr. Easter said.
"Pretty much everything we're developing now (is radial)," Mr. Easter said, adding that the tire maker also will be updating its bias-ply products and occasionally build a new product for underground mining which still uses bias-ply tires.
"As far as development of new products with Yokohama, our focus right now is radial."