Turning the corner: Global metals outlook
Part one of a three-part series on the future of the global metals industry
The past year has been a volatile one for the global metals industry—to say the least. Plummeting commodities prices, frozen credit markets, and diminishing demand has caused many metals manufacturers to take drastic measures in order to survive. What lies ahead for the sector? To find out, Deloitte’s Global Manufacturing Industry Group turned to a panel of metals industry leaders, including Nick Sowar, Claude Martin, and Dick McLaughlin, for perspectives on the state of the global metals industry—and what to expect down the road.
Whether the current downturn for the metals industry is a short-term crisis or a fundamental retrenching of the market remains unclear—but has significant implications for companies as they try to respond. The closing of production facilities, the panel points out, may not be temporary.
But the news may not be all bad for the global metals industry. The current pull-back in production has reduced inventory, indicating there could be a strong comeback in terms of demand when the economy does pick up again. And industry consolidation may mean fewer players and decreased competition. The chance to buy bargain assets also presents an opportunity for those companies with strong balance sheets.
Overall, to address the current downturn and prepare for an eventual turnaround, the panel viewed a need for companies to reduce fixed costs, consider restructuring, and rethink their current business model.
Read the press release.
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