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A fragmented industry with accelerating concentration processes, and new entries from emerging markets needs to meet social demands.
The largest segment of the global metals market is iron and steel followed by aluminum. The iron and steel segment comprises of more than half the global metal industry in terms of volume. The metals and minig sector find end-use in industries such as automobiles and consumer durables that rely upon this industry for the raw materials. For these reasons demand for a broad range of different types of product translates into demand for the products produced in global metal industry.
The industry is also highly cyclical, and has been negatively affected by the global downturn of the past few years. The industry is highly affected by fluctuations in its largest segment, steel (which accounts for over 60% of the market's value), which has been strongly affected by the continuing global economic downturn, and in turn has adversely affected the metals and mining market. Chronic overproduction is a problem in several sectors, especially the beleaguered steel manufacturing industry.
Like many companies in the present economic climate, companies operating in the metals and mining market are undertaking policies of cost improvement and margin maintenance whilst looking to further develop immature markets, and pre-empting the move of competitors.
The companies hit direct or indirect by global economic crisis, declaining demand especially from automotive and construction sectors insufficiency of working capital, and increasing competition in the markets. Decelining demand has caused reduce in capacy usage and production levels. Companies are also under the pressure of increasing finance costs. Moreover, due to devaluation cost of imported raw materials and semi-finished goods are increased. Demand from export markets is also declining due to global crisis and competition in the markets. after the crisis we expect more international companies at the sector via M&A activities.
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Steel, Iron and Mining