Aggregate Market Demand Analysis

Why aggregate market demand analysis starts with geography

In a crushing and screening investment, the most expensive mistake is building the plant where the market is not. Aggregate market demand analysis therefore starts with a map rather than an equipment list. Aggregate is bulky and low in unit value, so freight cost grows quickly against the value of the product itself. Beyond a certain distance, haulage takes such a share of the delivered price that no producer can hold price against a closer quarry. That is why the fiftieth kilometre is discussed in the industry as a turning point: transport begins to find its economic limit around there. The limit is not fixed. It contracts when fuel prices rise and widens when they fall.

Sales area: not a radius but real access time

A circle drawn on a map is misleading. What decides the outcome is not straight-line distance but the time a loaded truck spends under real road conditions. Mountain roads, a city crossing, a bridge restriction or a seasonal closure can double the cost of the same kilometre. The sales area is therefore defined by how many round trips a truck completes in a shift. A shorter cycle raises tonnage moved per truck directly, which is why the quarry location decision comes before the plant capacity decision. On routes where a return load can be found, effective cost falls and the area widens somewhat.

Who creates the demand: measuring source by source

A single estimate of total market size is not enough for a decision; the items that create demand are measured separately. The table below lists indicators that can actually be collected in the field and where they come from.

Fraction-level demand: total tonnage misleads

Total aggregate demand in a region can look healthy while demand for the fraction you will actually produce is weak. Concrete producers want the fine and intermediate fractions, asphalt producers want narrow specified bands, and fill and infrastructure work wants coarse and mixed material. A standard plant's product set is therefore matched to the market: the 0-5, 5-12, 12-19 and 19-40 mm ranges taken off the same plant go to different customer groups.

Capacity decision: base load, not the peak curve

Capacity is selected against sustainable base load, not against the market's peak. Demand from a road project that runs for two years does not finance a twenty year plant life. The sound approach is to install capacity that covers base load and to serve project demand by adding shifts or a supplementary mobile unit. That separation removes the risk of sitting on idle capacity once projects close out. Time-limited demand such as a road base and plant-mix contract is modelled as extra income that shortens payback, not as the justification for permanent investment.

Competition and the price floor

Where there is demand there is competition. Three things are measured: the declared capacity of existing quarries inside the sales area, how they actually run, and the remaining term of their permits. A quarry with large capacity but an expiring permit means a market gap within two years. The price floor is set by the nearest competitor's delivered price; a producer with a haulage advantage works at a wider margin on the same production cost. Competition analysis is therefore built on delivered price to a shared customer, not on ex-quarry price.

Putting the decision on paper

The analysis ends in a decision note of no more than three pages. It states the boundaries of the sales area and the constraints that set them, the annual demand forecast by fraction and the sources behind it, the split between base load and project load, the competitor inventory with permit expiry dates, and the thresholds that would invalidate the decision. That last item matters most: the change in fuel price, project timetable or competitor capacity that would trigger a review is written down from the start. Without those thresholds the analysis becomes a one-off document and loses its validity within the first year.