Metals & Mining

The European iron and steel industry has yet to return utilisation rates back to pre-crisis levels, with challenging market conditions expected to prevail in the coming years:

• Continuous fluctuation in commodities, dominated by global momentum
• Risk of excess capacities in China if demand slows

New strategies must be developed to sustainably create value:

• Client value: innovation, short supply chain, local services, etc
• Asset reconfiguration: new technologies, energy efficiency and organisational efficiency
• Upstream integration
• Allocation of investments: effectiveness of maintenance investments in mature regions and growth in emerging sectors

The aluminium sector has changed enormously over the past decade:

• Driven by China, capacities have doubled, placing traditional Western manufacturers at a disadvantage
• Ongoing divestment of major downstream transformation companies
• Exhaustion of competitive energy resources
• Challenge of composite materials in the aerospace industry, i.e. the traditional user of high value-added aluminium

Successful companies will be able to create value by capitalising on the many opportunities that may present themselves in the coming years:

• In emerging economies: new generation of low-cost electrolysis, paving the way for targeted growth investments in emerging energy-rich geographic regions
• In mature economies:
  – Continued cost-reduction efforts, which are increasingly difficult to achieve
  – Innovation and development of new aluminium solutions: transport, construction, packaging etc.

Ultimately, the leaders of these industries must focus their efforts on:

• Organic growth opportunities and acquisitions
• Technological innovation (increasing the value of extracted minerals)
• Operational performance: capex management, purchasing/procurement, SG&A, supply chain, pricing policy, sales efficiency