Shell turning to Asian suppliers, underscoring threat to Caterpillar, Joy Global

|By:, SA News Editor

Royal Dutch Shell (RDS.A, RDS.B) says it will use more Chinese equipment at its struggling U.S. shale business, becoming the latest natural resources company to try to reduce costs by switching to cheaper Asian suppliers.

Miners such as Rio Tinto (RIO) and Antofagasta (ANFGF) already are using more Chinese machinery, encouraged by improved reliability which they say can now be integrated into existing operations without compromising efficiency or safety standards.

Shell's shift to lower-cost Chinese manufacturers underscores the potential threat to western industrial equipment makers such as Caterpillar (CAT) and Joy Global (JOY) from their competitors in emerging markets.