Industrial Explosives Market

Market Overview

The global industrial explosives market was valued at USD 8,312.89 million in 2022. It is estimated to reach USD 13,230.16 million by 2031, growing at a CAGR of 5.3% during the forecast period (2023–2031).

Industrial explosives are high-hazard blasting agents used for quarrying, mining, and construction activities. As industrial explosives yield higher torque, they are widely used by tunneling companies across the globe. Various industrial explosives include gunpowder, cartridges, ammonium nitrate fuel oil (ANFO), pentaerythritol tetranitrate (PETN), and explosive accessories such as safety fuse, detonating fuse, and detonators. In addition, the speed of their explosion primarily categorizes industrial explosives. Industrial explosives are either deflagrated or detonated. Deflagration of industrial explosives refers to the explosion caused due to a flame, whereas detonation is caused due to an explosive shock wave traversing through the explosive. After an explosion, industrial explosives produce a strong torque accompanied by heat, light, sound, and pressure. Explosives that detonate are called high explosives, whereas explosives that are deflagrated are known as blasting agents or low explosives.

Highlights

• Blasting agents dominate the explosive-type segment
• Mining dominates the end-user industry segment
• Asia-Pacific is the highest shareholder in the global market

Market Dynamics

Global Market Drivers

Rising Tunnel Construction and Development Projects

Developing countries invest highly in expanding road networks, rail tracks, and tunnels for improved connectivity, leading to ease of doing business and contributing to the economy's growth. Rail infrastructure in India is estimated to invest about USD 715 billion by 2030. Moreover, tunnel structures are economical in the long run, as the land above the tunnel remains available for economic or community development.

The process of construction of any of these projects requires rock excavation. The drill and blast technique is the most common type of rock excavation and can be used in all kinds of rocks, such as igneous, sedimentary, or metamorphic rocks. It is highly efficient when executed rightly and reduces time and workforce. Therefore, the need for better connectivity coupled with efficient excavation offered by industrial explosives drives the growth of the global market. In addition, industrial explosives are used while excavating land to construct dams, lakes, and other artificial water reservoirs. Artificial water reservoirs meet the dual needs of water for consumption and the generation of hydroelectric power, which acts as a critical driver of the global market.

Increase in Mineral Extraction Activities

Mineral extraction through mining is the only source of extracting valuable and rare earth minerals from the earth's crust. Various minerals and metals are mined in large quantities to support economic infrastructure. With the increase in labor costs and a rise in the focus of mining companies on reducing overall turnaround time, various mining giants have adopted industrial explosives for earth moving and mine digging purposes.

Furthermore, large explosives are required in various mining operations, including metal mining, nonmetal mining, and quarrying. Coal is primarily mined by drilling and using explosives to generate electric power. About 90% of the coal consumption in the U.S. was for electric power. Countries such as China, India, and Brazil follow a similar trend. In addition, the surge in demand for iron and bauxite ores from various industrial applications is a crucial factor driving the demand for industrial explosives in the mining industry, which, in turn, boosts the growth of the market.

Global Market Restraint

Rising Natural Gas Prices

Mining companies employ industrial explosives due to their economical and practical advantages over mechanical excavation methods. The primary raw material used to produce industrial explosives is ammonium nitrate. The price of ammonium nitrate is dictated by the supply of ammonia, which, in turn, is dependent on natural gas prices. Therefore, the increased price of natural gas increases the cost of ammonium nitrate and leads to high manufacturing costs. As a result, mining companies are forced to opt for mechanical excavation methods. Thus, a rise in natural gas prices is anticipated to indirectly hamper the production of industrial explosives, leading to a hike in their prices. For instance, ammonium nitrate prices have increased significantly from 1% to 3% since 2011. This is expected to maintain this trend due to the rise in natural gas prices, thereby restraining the market's growth.

Global Market Opportunities

Government Initiatives in Mining Sector

Mineral commodities primarily include coal, metal ores, and rocks. Although coal is a chief feedstock for electric power, aluminum, and bauxite are essential commodities in the construction and automotive sectors. Gypsum produces cement, wallboards, plaster of Paris, soil conditioners, and hardening retarders. Therefore, similar to oil and gas-rich countries, mineral-rich countries can use their mineral resources to reinforce their macroeconomic stability. The absence of mining activity leads to more dependency on mineral imports, which is uneconomical. Hence, government mining departments invest in new mining projects to reduce mineral and coal imports. Such investments will offer remunerative opportunities to expand the global market. Similarly, reforms such as Make in India and 100% Foreign Direct Investment (FDI) are expected to transform India's metals and mining sector, which is opportunistic for the market.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global industrial explosives market is bifurcated into North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific is the most substantial shareholder in the global industrial explosives market and is anticipated to grow at a CAGR of 6.2% during the forecast period. Asia-Pacific is expected to project a steady growth in the market, owing to increased mining and mineral extraction activities in the region. The demand for industrial explosives in Asia-Pacific, especially in China, Australia, and India, is majorly attributed to the increase in coal mining and iron ore reserves. Factors such as low labor costs, abundant earth minerals, and the inclination of mining giants in the region to reap huge profits are some key aspects fueling the demand for industrial explosives. Governments of various Asia-Pacific developing markets have focused on extracting rich mineral resources to fuel their countries' GDPs, thus supporting international mining companies and investors to invest in these countries. In addition, an increase in government perturbs for the enhancement of rail and road transport services, the inclination of government toward the integration of renewable sources of energy such as hydroelectric power plants, a rise in building restructuring activities, tunneling for rails and roads, and rapid investments in setting up industrial plants are anticipated to offer potential growth opportunities for the Asia-Pacific market.

North America is estimated to grow at a CAGR of 4.7% over the forecast period. The presence of many global mining and construction companies has positioned North America as one of the most lucrative markets for the mining industry. Implementing stringent government regulations for using industrial explosives to extract the maximum of underground mineral reserves is a significant aspect fueling the demand for explosives. In addition, the increase in demand for precious metals, such as copper, gold, iron, and zinc, especially from Mexico and the U.S., is a crucial factor driving the growth of the market in the region. The United States is a major consumer of coal and has abundant coal reserves. Moreover, the U.S. offers lucrative opportunities for the market due to abundant copper, iron ore, gold, platinum, and zinc reserves. Furthermore, Canada, rich in petroleum and oil sand reserves, is expected to witness strong demand for industrial explosives.

Europe is expected to grow significantly over the forecast period. According to Euromines, an association of several mining agencies, the mining industry is one of the matured sectors in Europe and majorly extracts aluminum, iron ore, bauxite, silver, and gold. Hence, Europe is one of the key regions for industrial explosives. In addition, Russia is the most lucrative country in the region, as it has the largest proven iron ore and tungsten reserves and the second-largest coal reserves in the world. The demand for industrial explosives in Europe has increased, primarily due to the rise in demand for various metals and coal. Most of Europe's coal and other metals are imported from neighboring countries such as India, Russia, China, and Turkey. Hence, various international mining giants have focused on investing in these highly lucrative countries to decrease overall import costs and extract significant minerals from the earth. Moreover, an increase in investments in the construction industry, especially in developing economies such as Poland and parts of Russia, is anticipated to offer potential growth opportunities for the European market.

LAMEA is a lucrative region for the market due to its rich mineral ore reserves. This region's construction and mining sectors are creating demand for industrial explosives. The strong presence of oil fields in the Middle Eastern countries and the availability of cheap labor, along with reasonable trade treaties with European and Asian countries, encourage multinational mining companies to set up their facilities and operations in the region. Furthermore, a constant demand for precious metals such as gold and silver fuels the growth of the market. Conclusively, new mining establishments, government export policy upgrades, and water resource integration projects are expected to offer tremendous opportunities for the expansion of the LAMEA industrial explosives market.

Segmental Analysis

The global industrial explosives market is segmented by explosive type and end-use industry.

Based on the explosive type, the global market is bifurcated into high explosives and blasting agents. 

The blasting agents segment is the highest contributor to the market and is projected to exhibit a CAGR of 5.4% over the forecast period. Blasting agents are explosives that comprise oxidizers such as ammonium nitrate, fuel such as fuel oil or aluminum, and sensitizers such as tiny air bubbles or air pockets, which are non-explosives by themselves and can be detonated only by placing a high explosive charge. In addition, sensitizers provide the required heat source to catalyze the chemical reaction of oxidizer and fuel. Blasting agents include ANFO, emulsions, water gels, and slurries. Blasting agents are relatively less sensitive to shock or heat and safe to store in a dry place.

Additionally, the deployment of blasting agents in seismic wave generation and oil fields is a significant factor driving the growth of the blasting agents market. Emulsion explosives offer many advantages over other blasting agents, such as safety in fumes generated, enhanced water resistance, increased detonation velocity, savings in drilling operations, and low gas emissions. Therefore, an upsurge in emulsions over other blasting agents is a key factor anticipated to offer remunerative opportunities for expanding the overall blasting agents market during the forecast period.

A high explosive is any chemical mixture that detonates with a reaction velocity of over 5,000 feet per second. It is employed in demolition, mining, and military applications. High explosives can further be subcategorized into primary and secondary high explosives, depending upon the magnitude of sensitivity. Primary high explosives include lead azide, mercury fulminate, and tetrazene, whereas secondary high explosives include dynamite and trinitrotoluene (TNT). Moreover, the rise in demand for mineral extraction, particularly in emerging economies like India and China, is a significant factor that is anticipated to create profitable growth opportunities for the high explosives market. Thus, the vast applications and benefits of high explosives in mining and military activities significantly contribute to the growth of the global market.

Based on the end-user industry, the global market is segmented into mining, construction, and others. 

The mining segment owns the highest market share and is predicted to exhibit a CAGR of 5.4% during the forecast period. Industrial explosives have replaced conventional mechanical drills, human labor, and open-pit mining techniques. Industrial explosives, such as trinitrotoluene (TNT), dynamite, ANFO, and emulsion, are used by various mining giants to achieve a productive blast hole to extract multiple types of metals and minerals. Diverse industrial explosives are used for different mining activities, depending upon the mineral/metal to be extracted. The mining segment in the global market is sub-segmented into metal mining, nonmetal mining, and quarrying. Various coal mines prefer industrial explosives to save the overall digging time, enhance safety, and reduce costs. Therefore, the introduction of industrial explosives serves as a feasible option.

Furthermore, the focus is reducing the toxic gases released after blasting. Such innovative trends drive the demand for industrial explosives. In addition, rapid growth in mineral production, changes in demographics, and a positive outlook for industrial explosives in the overall mining industry are expected to drive the development of the market during the forecast period.

Industrial explosives are used in the tunneling, dam, demolition, or road construction activities. The use of industrial explosives in the construction industry has gained popularity, as it reduces the overall cost, time, and labor. Tunneling requires high-density explosives, as hard rocks and mountains are the sites of explosions. The inclination of civil engineers toward industrial explosives to reduce the overall process time, along with labor costs and the need to achieve efficient blasting, especially for tunneling purposes, are some of the major trends prevailing in the industrial construction explosives market. Furthermore, investments in the construction and transportation sectors require extensive excavation of landmass. Such upcoming projects are bound to offer remunerative opportunities for the global market growth.

Recent Developments

• January 2023- Fluitron LLC, a well-known developer and producer of industrial-grade gas compression systems, completed the manufacturing, testing, installation, and PESO (Petroleum and Explosives Safety Organization) approval for India's first locally-made hydrogen dispenser.

• February 2023- SRG Global was granted a five-year contract worth USD 156.5 million by the gold producer Northern Star Resources for Western Australia's Bronzewing gold operations (WA). SRG will provide professional drill and blast services, explosives management, and grade control drilling throughout the five-year contract.