LONDON--(BUSINESS WIRE)--Technavio’s latest market research report on the global metal machining scrap equipment market provides an analysis on the most important trends expected to impact the market outlook from 2017-2021. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
Gaurav Mohindru, a lead analyst from Technavio, specializing in research on engineering tools sector says, “Any metal cutting involves generation of scrap parts, which necessitates centers to properly segregate the scrap metal and process it into the raw metal. Along with creating millions of jobs, the industry also helps in creating a sustainable environment. Recycling of metals saves energy that would otherwise get wasted in mining, refining, and manufacturing activities. This, not only saves material cost but also has beneficial effects on the environment.”
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The top three emerging market trends driving the global metal machining scrap equipment market according to Technavio research analysts are:
- Growing sales of electrical vehicles
- Importance of recycling
- Shift in manufacturing base
Growing sales of electrical vehicles
The interest in electrical vehicles (EV), over the past few years, in the US automotive sector has surged, with manufacturers beginning to introduce new EVs with progressive technology. The country is proposing to be the global leader in next-generation vehicle technologies. The EVs sales in Europe have increased drastically and have recorded a blooming sale. Similarly, the EV market in China is exhibiting enormous growth prospects, driven by supportive government subsidies and improving battery technology in the country.
With demand for these vehicles expected to propel in the future, there will be demand for raw scrap material, especially non-ferrous scrap material. This will create demand for scrap processing machines.
Importance of recycling
The world would be an intensely different place with more pollution and greenhouse gases, increased energy use, and significantly faster depletion of the existing natural resources in the absence of scrap recycling industry. Scrap recycling protects the earth’s resources and environment by ensuring the optimum use of resources and restricting new mining activities.
The automobile sector is a major consumer of metals and producer of scrap. With each passing year, the number of older cars on the road is increasing, raising the level of pollution in the atmosphere. As a result, to curb pollution, several governments across the world are imposing policies on scrapping age-old cars that are responsible for emitting pollutants.
“Governments are introducing several incentive schemes comprising of discounts and tax deductions to encourage people to surrender their old cars and opt for new ones. These moves will not only help in curbing the pollution levels but also revive and increase the turnover for the automotive industry,” says Gaurav.
Shift in manufacturing base
Major multinational companies in the US had outsourced their manufacturing to APAC due to the availability of low-cost labor. However, the labor wages have now increased considerably in APAC. This has forced the companies in the US to relocate their manufacturing plants to neighboring countries, such as Brazil and Mexico, which is leading to increased demand and consumption for scrap metals in the region.
The shift in manufacturing base may lead to higher consumption of scrap metal, as several countries in the region use EAF process for steel production, wherein scrap is the main raw material.
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