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The Impact of Rising Oil Prices on Construction Machinery Industry

Publication Date: 2021-11-02

According to reports, the rise in oil prices in 2021 has just begun, and falling inventories around the world show that the market is far from balanced. Even after reaching their highest levels in several years in recent days, there is room for oil prices to rise further this winter. On the demand side, the economic recovery has boosted global oil demand in recent months, bringing global inventories below their recent average.

1. Increase the cost expenditure of construction machinery users

Construction machinery most of the use of diesel as raw materials, diesel prices, construction machinery equipment in the use of the process, the cost of oil consumption is a very big cost, play far higher than the depreciation cost, loan interest and labor costs, fuel costs change is the main factor affecting the cost of construction machinery.

2. machine owners want to shortcut to ensure interests, not conducive to social security

Diesel oil has a deep impact on construction machinery. For example, the oil shortage in 2011 has a small impact on the income of construction machinery users. The owners of excavators and loaders in some regions shut down due to no oil available. Some owners have to find a way to buy more expensive fuel, which reduces their income. The rise in diesel prices will also result in the cost of these large consumers.

In addition to these negative effects, rising oil prices also bring indirect benefits. The advent of the era of high oil prices, from the point of view of operating costs, is indeed a negative impact on the construction machinery industry; But everything is generally pros and cons symbiosis, oil prices on the construction machinery impact also has a positive side.

1. The rising price of oil will also encourage construction machinery producers to develop alternative energy products to diesel, such as natural gas, solar power, or microbial fuel cells. If natural gas is used, the price is cheap, the use cost of construction machinery will be reduced, which can promote the development of environmental protection construction machinery market

2. Host manufacturing enterprises pay more attention to the research and development of energy-saving construction machinery products and hybrid power products; Diesel engine manufacturers will also increase investment in the research and development of energy-saving power products

To sum up, the impact of rising oil prices is multi-faceted. The price rise is a foregone conclusion. Only by seeking benefits and avoiding disadvantages from our own perspective can we achieve long-term development

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