The super-cycle in commodities may proove a myth. Commodities Prices are at historical highs and a subsequent fall in prices would weaken Joy Global's sales.
Revenue from coal customers account for 70% of Joy Global's revenue. This lack of diversification exposes Joy Global to shifts in coal production throughout the world. A cleaner alternative energy, such as nuclear power, may be accepted over coal. Weak demand for coal results in lower sales volume for Joy Global.
Joy Global operates in a highly cyclical industry. Demand for new equipment tends to move with economic tends. A global recession would damper profits as fixed-costs remain to be paid, while sales decrease.
