The metals and mining industry is facing a continued slowdown in demand due to reduced growth in China as well as due to global economic instability. At the same time, demand for thermal coal is dropping quickly as coal generation is replaced with natural gas and renewables. While the fastest growth area in recent years has been in commodities such as cobalt, lithium, vanadium, and rare earths which enable new technologies such as electric vehicles, even these commodities are facing overcapacity. Steel and nickel prices face continuing volatility, with commodity prices increasingly out of sync with finished product prices. Global demand and trade flows are subject to increasing trade restrictions and tariffs. New investments driven by these tariffs coincided with slowing demand, exacerbating overcapacity. Many legacy producers are unable to compete with both developing countries as well as western companies utilizing lower cost production methods such as electric arc furnaces. At the same time, demand for high cost and high margin steel products, including corrosion resistant alloys from industries such as oil and gas, has yet to recover while the near term demand outlook in other important industries such as petrochemicals and power generation is uncertain.
Given the currently challenging conditions, companies in the metals and mining industries need to refocus on operational excellence and take advantage of the increasing focus on automation and digitization to outperform their competitors. Steel and other metal providers must understand the changing dynamics across their end markets and customers to align their portfolios with demand trends and stay ahead of the curve.