According to a research report, the current upcycle in the mining machinery industry is perceived by the market as being driven by rising commodity prices and potential interest rate cuts by the Federal Reserve, suggesting limited sustainability. However, this cycle differs from previous ones, with a more critical factor being the intensification of global geopolitical disturbances against the backdrop of deglobalization. Nations are increasingly competing for resources, and the demand for securing supply chains and ensuring stable industrial capacity for critical resources is expected to continue strengthening.

Domestic mining machinery manufacturers possess differentiated competitive advantages in terms of cost-effectiveness and customized equipment design. Under the trend towards greater self-sufficiency and control over resource supply chains, the global market share of Chinese mining machinery companies has significant room for expansion. The main viewpoints are as follows:

Global geopolitical disruptions are intensifying, supporting the view that the mining machinery sector's high growth will persist. While the market attributes the current industry upswing to higher commodity prices and anticipated Fed rate cuts—implying short-term sustainability—this cycle is distinct. The key driver lies in heightened geopolitical tensions amid deglobalization, leading to intensified competition for resources among nations. This is expected to persistently reinforce the focus on securing robust supply chains and industrial capacity for essential resources.

This shift impacts the traditional capital expenditure transmission mechanism in mining: mining companies' capital expenditures are likely to respond more swiftly to price changes, and the scale of investment is expected to be larger compared to previous cycles. The mining machinery industry stands to benefit directly from this increase in capital spending, supporting the continuation of its strong growth phase.

Under the trend of securing autonomous and controllable resource supply chains, domestic mining machinery manufacturers have substantial potential to increase their market share. Chinese mining machinery companies currently hold a relatively low share of the global market. According to the 2025 Jakarta Top 50 Global Mining Equipment Manufacturers ranking, the top five companies—Caterpillar, Komatsu, Sandvik, Epiroc, and Metso—are all overseas firms, with combined sales of approximately $42.2 billion, representing a CR5 of about 55%. Thirteen Chinese companies, including Tiandi Technology, Zhengzhou Coal Mining Machinery, and XCMG, were listed. The total sales of Chinese companies on the list reached $14.723 billion, accounting for only 19.21% of the total.

Domestic mining machinery manufacturers have competitive edges in cost-performance and customized equipment design. As the push for greater control over resource supply chains continues, there is considerable potential for Chinese manufacturers to expand their global market share.

Investments under the Belt and Road Initiative are expected to drive the international expansion of Chinese mining machinery, accelerating the increase in their market share. It is noted that China's outward investment is projected to grow further in 2025. Preliminary statistics from the Griffith Asia Institute indicate that the focus of China's BRI-related projects is on energy and metal mining sectors. The active expansion of Chinese enterprises overseas is set to boost demand for related equipment. With the positive growth in Belt and Road investments, the market share of domestic mining machinery manufacturers is anticipated to rise.

Investment recommendation suggests that the current upcycle in mining machinery is expected to be more prolonged, presenting investment opportunities. The broader mining machinery growth cycle encompasses three stages: bulk raw material development, energy extraction, and construction utilization. The industry is currently in the first stage, and related equipment companies are poised to benefit from the sector's upward trend.

Relevant companies include: XCMG (000425.SZ), Naipu Mining Machinery (300818.SZ), SANY INT'L (00631), Shantui Construction Machinery (000680.SZ), Tongli Heavy Industry (920599.BJ), and Northern Heavy Industries (600262.SH).

Risks include macroeconomic fluctuations leading to investment falling short of expectations, industry policies not meeting expectations, mining companies' capital expenditures being lower than anticipated, delays in mining project progress, and global trade friction risks.