Hitachi Construction Machinery has taken a dimmer view of the mining market than most of its European peers, lowering its full-year outlook again amid what it sees as damaging US tariff policies and Chinese economic sluggishness.
While European mining equipment leaders such as Sandvik, Epiroc and Weir have reported healthy ordering activity and generally robust sales outlooks, HCM says it expects mining machinery demand for FY2025 (to March 31 next year) to decline by 10-15% year-on-year.
The Tokyo-listed HCM has chopped Y16 billion, or circa-US$110 million, off its April FY25 mining revenue forecast, which now sits at Y270.1 billion (US$1.87 billion), down 5% on last year.
“For new machinery sales we expect a 9% year-on-year decline in revenue for both trucks and excavators combined, and a 3% decrease in parts and services,” the company said.
Last year’s US$1.98 billion mining revenues were down on the record level achieved in FY23.
HCM’s total FY25 first-quarter revenues declined 7% yoy to Y306.2 billion (US$2.18 billion). Net income for the period was down 54% yoy to Y11.3 billion (US$78 million).
Q1 mining revenue, 21% of the total, was Y63.4 billion (US$438 million), down 12% yoy.
“In terms of new machinery sales truck revenue declined by 15% year on year mainly due to the absence of large-scale deliveries to Africa and Latin America seen in the previous fiscal year. Excavator sales also fell by 9%,” HCM said.
“Additionally, parts and services revenue decreased by 12%, reflecting a trend of deferred maintenance in Australia and Asia.”
HCM CFO Keiichiro Shiojima said FY25 resource prices were expected to “remain sluggish”.
“Various uncertainties, including US tariff policies and the slowdown of the Chinese economy, are likely to affect resource demand,” he said.
“As a result total demand for mining machinery is projected to decline by approximately 10-to-15% compared to the previous year.
“The [downward full-year] revision reflects risks that were not incorporated in the previous forecast released in April, particularly the impact of US tariff policies. These include increased tariff-related costs and a decline in demand and sales for general construction machinery.”
The company is guiding for group full-year revenue of Y1300 billion (US$8.99 billion) and net income of Y73 billion (US$504 million). “With rising uncertainty, especially in North America, we are factoring in the risk of a global slowdown in demand and sales of general construction machinery due to US tariffs,” it said.
HCM president Masafumi Senzaki said the company expected to absorb some higher costs associated with the application of US tariffs through price increases.
“Due to these tariffs uncertainty has increased, particularly in North America, and we are factoring in the potential decline in demand and sales for general construction machinery globally as a major risk,” he said.
“We are also reflecting the recent slowdown in orders in the mining sector.
“Although tariffs will lead to increased costs, we expect to partially offset this through price increases.”
Senzaki said there was a “noticeable tendency” among mining customers to delay maintenance schedules, impacting demand for specialised parts and services.
“On the other hand, operating hours for mining machinery remain steady, which gives us some optimism for a future recovery,” he said.
