According to the document, global steelmaking capacity in excess of demand is expected to increase from approximately 601 million tonnes in 2024 to 745 million tonnes by 2028, reaching its highest level in a decade.

The imbalance is particularly significant because steelmaking capacity is expanding much faster than consumption. Between 2026 and 2028, global steel demand is expected to increase by only around 34 million tonnes, while production capacity could grow by as much as 139 million tonnes.

What is driving the excess capacity?

The GFSEC attributes an important part of the problem to government policies and other practices that, according to the forum, distort market conditions, including subsidies and other forms of support for steel production.

China receives particular attention in the document. According to GFSEC figures, Chinese steel exports reached 131 million tonnes in 2025, an increase of 153% compared with 2020.

The forum also highlights investments by Chinese steelmakers outside China. Around 70 million tonnes of new capacity are estimated to be under development, particularly in Southeast Asia and Africa.

As domestic steel consumption in China grows more slowly, a larger share of production may seek international markets, increasing competitive pressure on steel producers in other regions.

The problem is not only about steel prices

Excess capacity reduces plant utilization and puts pressure on steel prices and producers' margins.

The document states that in 2024, EBITDA in the steel industry remained below 10% of sales, a level considered insufficient to adequately support investment in innovation, resource efficiency and new technologies.

This can create a difficult cycle:

Excess capacity → price pressure → lower profitability → reduced investment capacity → greater difficulty modernizing plants.

A new international response

In response to the situation, the 28 members of the GFSEC agreed on a Comprehensive Framework for Joint Action aimed at addressing both the causes and the effects of global steel excess capacity.

The framework includes:

• greater coordination among member countries;
• information sharing on policies that distort market conditions;
• stronger trade-defense instruments;
• measures against trade diversion and circumvention;
• closer monitoring of international steel flows;
• identification of practices that contribute to excess capacity.

The objective is to prevent excess steel from simply being redirected from one market to another when individual countries introduce trade measures.

Brazil is among the 28 GFSEC members, together with the United States, European Union, Japan, South Korea, Mexico, Canada, Australia, the United Kingdom, Türkiye and other major steel-producing economies.

What does this mean for the metal industry?

For the broader metal industry, the implications go well beyond steel producers.

For iron and steel foundries, prolonged pressure on raw-material prices may affect production costs and margins. At the same time, stronger international competition could increase pressure on manufacturers of castings and components.

For steelmakers, the situation means greater pressure on plant utilization, prices and profitability. Producers with higher operating costs may face increasing competitive challenges.

For manufacturers of components, machinery and equipment, lower steel prices can reduce costs in some circumstances. However, stronger international competition can also put additional pressure on local manufacturers competing with imported products.

For international trade, the situation could lead to greater use of anti-dumping measures, safeguards, tariffs and other trade-defense mechanisms. This could rapidly change steel flows between China, Asia, Europe, North America and Latin America.

There is also an important issue for Brazil. Countries with weaker trade-defense measures could become alternative destinations for excess steel production. This makes monitoring imports and international trade policies particularly important for the Brazilian metal industry.

Why it matters for foundries

For foundries, the GFSEC statement should be viewed as more than a steel-industry story.

Steel overcapacity can affect the entire industrial chain:

steel → pig iron and scrap → foundry → machining → components → automotive, machinery and industrial equipment.

Changes in steel prices, import flows and trade barriers can therefore influence the competitive environment in which foundries operate.

For iron foundries, particularly those supplying automotive and machinery manufacturers, the evolution of steel and iron prices is only one part of the equation. Changes in international trade flows can also affect the availability and price of competing components and finished products.

For the Brazilian market, the issue is especially relevant because changes in imported steel flows can have consequences throughout the domestic manufacturing supply chain.

In summary

The GFSEC statement shows that the global steel industry's problem is no longer simply a matter of competition between individual companies.

The gap between global production capacity and actual demand is widening, while governments of major steel-producing economies are increasing coordination in an attempt to address the resulting market distortions.

For the Brazilian metal industry, the developments could affect steel prices, imports, the competitiveness of domestic steelmakers, foundry costs, component manufacturers and international trade flows.

The key question for the coming years is whether the new international coordination will be sufficient to reduce excess capacity — or whether steel production capacity will continue to grow substantially faster than global demand.

Source: Global Forum on Steel Excess Capacity (GFSEC), Ministerial Statement, Milwaukee, September 30, 2026.

Three-month aluminium on the London Metal Exchange fell to around US$3,146 per tonne, after reaching an intraday low of US$3,141 — its lowest level since July 28. The movement was part of a broader decline among industrial metals.

One factor behind the decline is the possibility that supply flows from the Middle East, an important region for aluminium production, could improve if geopolitical tensions ease.

Why it matters for aluminium foundries

Aluminium is one of the most important metals for the modern foundry industry, particularly in automotive, transportation, machinery and lightweight engineering applications.

Changes in the international aluminium price directly affect foundry input costs and can influence quotations for castings, inventory decisions and purchasing strategies. For companies operating with relatively tight margins, even moderate movements in metal prices can have a significant effect on profitability.

Lower aluminium prices may provide some relief to foundries and component manufacturers. However, the situation remains closely linked to energy costs, transportation, geopolitical developments and the availability of primary and recycled aluminium.

For aluminium foundries, therefore, the current price movement is worth monitoring not only as a short-term purchasing opportunity, but also as part of the broader picture of global aluminium supply, energy costs and industrial demand.

Souce link: https://www.tradingview.com/news/reuters.com%2C2026%3Anewsml_L1N45N077%3A0-aluminium-falls-to-2-month-low-on-iran

According to the European Steel Association (EUROFER), EU steel exports to countries outside the bloc fell by 20% in the first half of 2026. European crude steel production had already reached a historic low of 125.8 million tonnes in 2025 and declined by a further 1% during the first five months of 2026. Meanwhile, apparent steel consumption in the EU is expected to grow by only 0.1% in 2026.

The European industry is being affected by several factors at the same time: high energy costs, growing international trade restrictions, competition from regions with lower production costs and the continued impact of global steel overcapacity.

Why it matters for the metal industry

The situation goes beyond steel producers. A weaker and more expensive European steel industry can affect the entire metal supply chain, including foundries, machining companies, component manufacturers and automotive suppliers.

For foundries, changes in steel prices and availability can influence the cost of scrap, ferroalloys, equipment and finished components. At the same time, weaker industrial activity in Europe can reduce demand for castings, particularly in sectors such as automotive, machinery and construction.

On the other hand, the European push to protect domestic production and invest in lower-carbon steel could create opportunities for suppliers capable of providing more sustainable materials and technologies.

For the global foundry industry, Europe’s situation is therefore an important indicator of how energy costs, trade policy, decarbonization and global overcapacity are reshaping metal manufacturing.

Read the full EUROFER report

Eurometal predicts 300,000 job losses in manufacturing in the rest of 2026 because of expanding competition from China, which is now enjoying a record €1bn-a-day trade surplus with the bloc.

On Monday, Eurometal will bring its concerns to decision-makers in Brussels, staging a protest using 10 symbolic coffins in a procession around the European Commission headquarters.

The coffins will be marked with phrases such as “EU competitiveness”, “industrial jobs” and “European factories”.

European manufacturers fear that the commission is not fully alive to the cannibalisation of their industries as China becomes embedded in supply chains through the sale of components.

Alexander Julius, the president of Eurometal, told the Guardian: “China has made no secret of what it is doing. It is in their five-year plan.

“China doesn’t want to be a raw material supplier, it wants to be a finished product supply. They want to be in key product supply chains because they know that once they control the supply ch

ain, they own the complete value chain.” He wants the commission to understand fully the impact of Chinese exports at component level, including metals and chemicals used in 90% of manufacturing.

The EU has already taken action on electric vehicles by imposing tariffs on Chinese imports in 2024, and in June introduced higher tariffs on imports of foreign steel. The bloc’s trade commissioner, Maroš Šefčovič, has also said the EU’s €360bn (£310bn) annual import/export imbalance with China is “not sustainable”, with both sides agreeing to hold three months of talks, ending in October, to try to avert a trade war.

“You look at the job losses stacking up in industries in places like Germany. The media, the politicians can see the consequences, but they don’t go after the virus that is causing it,” Julius said. “They don’t see why it is happening or ask why companies are either relocating to China or India or going bust.”

Among the conditions allowing the “virus” to spread is the increasing costs borne by European metal manufacturers with tariffs on steel imports and carbon emissions taxes for those high-energy sectors.

Components manufactured in China face none of those levies, said Julius, and that, combined with the undervaluation of the Chinese currency, the yuan, makes it challenging to compete with Chinese rivals, he added.

The FISI is the earliest available composite indicator providing information on the performance of the European foundry industry. It is published monthly by EFF — European Foundry Federation and is based on survey responses from the European foundry industry. EFF members assess both the current business situation and their expectations for the next six months.

European manufacturing environment continues to improve

The August FISI results should be viewed against a more encouraging manufacturing environment. European manufacturing also strengthened during August. The final Eurozone Manufacturing PMI reached 52.7, up from 51.9 in July and its highest level since May 2022. The improvement was supported by stronger manufacturing activity in Germany, although conditions remained uneven across individual European economies.

The Business Climate Indicator (BCI) for the euro area stood at ‑0.22 in August, compared with ‑0.19 in July. Although it therefore remains in negative territory, the longer-term chart shows that the business climate has recovered considerably from the lows recorded in 2024. The BCI is published by the European Commission and assesses conditions in euro-area manufacturing based on production trends, order books, export order books, stocks and production expectations.

Taken together, FISI at 97.0, BCI at ‑0.22 and European Manufacturing PMI at 52.7 present a mixed but gradually improving picture. Manufacturing activity is expanding, while confidence in the European foundry industry is recovering more slowly and remains below its benchmark level.

Iron foundries: current conditions soften, but expectations rebound

The situation of European iron foundries remained mixed in August. The assessment of the current business situation decreased by 0.5 points to 99.5 index points, bringing it just below the benchmark level of 100. At the same time, however, expectations improved significantly. The index measuring expectations for the next six months increased by 2.7 points to 88.0.

This represents a notable change compared with July, when the current-situation indicator had improved to 100.0 while six-month expectations declined to 85.3. The August results therefore suggest that, although current market conditions have softened slightly, iron foundries have become more confident about the months ahead.

Nevertheless, expectations remain well below 100. This indicates continued caution regarding future order intake and demand from important customer industries. Iron foundries remain particularly exposed to developments in automotive production, mechanical engineering, commercial vehicles, agricultural machinery and other industrial sectors.

The August increase in expectations is encouraging, but a sustainable recovery will ultimately depend on stronger orders and higher production volumes across European manufacturing.

Steel foundries: current situation remains very weak, but expectations improve

European steel foundries continue to report the most difficult current conditions among the three major foundry segments. In August, the assessment of the current business situation increased slightly by 0.2 points to 74.5 index points. At the same time, expectations for the next six months increased by 0.6 points to 98.2. The substantial gap between the current-situation index of 74.5 and expectations of 98.2 is particularly significant. It shows that steel foundries remain under considerable pressure today, but companies expect conditions to improve over the coming six months.The July figures already showed this contrast, with current conditions at only 74.3 and expectations at 97.6. The August improvement in both indicators is therefore positive, although the extremely low current-situation reading confirms that a meaningful recovery in actual business activity has yet to materialize.

Steel foundries remain dependent on investment-intensive sectors such as heavy machinery, energy, mining, rail, infrastructure and defence. Stronger capital investment and industrial orders will therefore be essential if improved expectations are to translate into higher capacity utilisation and production.

Non-ferrous foundries remain the strongest segment

The picture is substantially more positive for European non-ferrous foundries. In August 2026, the assessment of the current business situation increased by 0.4 points to 133.6 index points. Expectations for the next six months strengthened even more, rising by 1.9 points to 150.9. Both indicators are not only well above the benchmark level but also considerably stronger than those recorded in the iron and steel casting segments. In July, the current-situation indicator stood at 133.2 and expectations at 149.0, meaning that the sector strengthened further in August. Non-ferrous foundries therefore remain the strongest part of the European foundry industry. The segment continues to benefit from demand connected with lightweight components, electrification, energy technologies and advanced industrial applications.

The particularly high six-month expectations reading of 150.9 indicates strong confidence compared with the ferrous casting sectors and suggests that non-ferrous foundries expect favourable market conditions to continue.

Outlook: recovery is becoming more visible, but remains uneven

The August results provide grounds for cautious optimism. Overall FISI increased from 96.0 to 97.0, while global manufacturing activity remained firmly in expansion territory with a PMI of 52.3. Eurozone manufacturing strengthened further, reaching a PMI of 52.7. At the same time, the BCI remained negative at ‑0.22, demonstrating that the broader European industrial environment is not yet free of uncertainty.

The differences between individual foundry segments remain striking. Iron foundries are close to the benchmark level in their assessment of current conditions, but their expectations remain subdued. Steel foundries continue to experience particularly weak current business conditions, despite substantially stronger expectations for the coming six months. Non-ferrous foundries, by contrast, report both strong current conditions and very positive expectations.

For European foundries, the key question is now whether improving manufacturing activity and stronger expectations will translate into higher order intake, increased capacity utilisation and stronger investment by customer industries.

The industry continues to face significant structural challenges, including high energy and production costs, geopolitical uncertainty, global competition and uneven demand from key customer sectors. EFF has also highlighted competitiveness issues related to the EU’s Carbon Border Adjustment Mechanism (CBAM), particularly the risk that European foundries face higher costs for imported raw materials while many imported finished foundry products remain outside the mechanism’s scope.

European foundries are strategic suppliers to the automotive, machinery, energy, railway, aerospace, defence, construction and infrastructure sectors. Maintaining a competitive European foundry industry is therefore essential not only for foundry companies themselves, but also for resilient European industrial supply chains and Europe’s long-term industrial competitiveness.

EFF – European Foundry Federation will continue to monitor developments through its monthly European Foundry Industry Sentiment Indicator (FISI), providing market intelligence on current conditions and expectations across the European foundry industry.

Table – FISI and BCI in 2026:

The FISI – European Foundry Industry Sentiment Indicator – is the earliest available composite indicator providing information on the European foundry industry performance. It is published by EFF —  European Foundry Federation every month and is based on survey responses of the European foundry industry. The EFF members are asked to give their assessment of the current business situation in the foundry sector and their expectations for the next six months.

The BCI – Business Climate Indicator – is an indicator published by the European Commission. The BCI evaluates development conditions of the manufacturing sector in the euro area every month and uses five balances of opinion from industry survey: production trends, order books, export order books, stocks and production expectations.

Purchasing Managers’ Index (PMI) -  in the Euro area is an indicator of the economic health of the manufacturing sector. It is based on such indicators as: new orders, inventory levels, production, supplier deliveries and the employment environment.

During the presentation by WFO General Secretary José Javier González Estévez, “From the Global Foundry Industry to Sustainability: The Strategic Importance of the Sector and the Path towards Decarbonization in the Metallurgical Industry”, one message was clear:

The transition to a low-carbon economy will not happen without foundries.

Foundries provide essential components for renewable energy, electrification, mobility, infrastructure and advanced manufacturing. At the same time, the sector must continue reducing its environmental footprint while safeguarding competitiveness, technological capability and skilled employment.

Thank you to the CNMAT 2026 organizers, speakers and participants for creating an excellent forum for exchange in Spain.

Herculano Mineração obtained two licenses required for its iron ore project in the state of Minas Gerais, in Brazil, with estimated investments of 300 million reais (US$60 million).

The State Environmental Policy Council (Copam) simultaneously granted the Preliminary License (LP), which certifies the environmental feasibility of the project, and the Installation License (LI), which authorizes the company to begin the implementation works.

The approval was published in an edition of the Official Gazette of the State of Minas Gerais, available at this link.

The Serro Project provides for the implementation of mining and operation activities at an iron ore mine, with an estimated production capacity of 1 million tons per year of dry ore, without the use of tailings dams.

The deposits are located in the area called Fazenda Céu Aberto, in the municipality of Serro, in Minas Gerais.

Despite the progress of projects related to critical minerals, iron ore continues to be the mining segment with the largest volume of planned investments in Brazil.

Projects in the sector are expected to attract approximately US$19.8 billion in investments between 2026 and 2030, according to projections by the Brazilian Mining Institute (Ibram), an entity that represents some of the main mining companies in the country.

For more than a decade, a single benchmark (Platts 62% Fe) priced the trillion-dollar iron ore market. That is no longer the case. Prices now increasingly reflect a basket of indexes rather than one reference point, a shift that built quietly for years, accelerating into late 2025. Futures and swaps markets, built for decades around one benchmark, will need to catch up with this reconfiguration of iron ore pricing. Here is what changed, why, and what it means for anyone tracking the market.

So far in 2026, the 62% Fe benchmark has stayed contained, trading roughly between $100 and $110/t across the year, compared with the much sharper seasonal swings of prior cycles. While benchmark pricing has long assumed a 62% iron content standard, declining ore quality from ageing mines (Australia's Pilbara region) prompted a downward adjustment in benchmark specification down to 61% this year. Looking ahead, SGX 61% futures are trading within a narrow band anchored around 99-100 $/t over the coming months, with the front-month contract settling at 100.30 $/t at the time of writing.

62% Fe benchmark over the years ($/t)

Note: 62% Fe prices for 2026 are derived by applying a grade differential to the 61% Fe IODEX benchmark from January 2026 onwards. Dotted lines indicate Kpler forecasts (1st July 2026).

Source: Kpler Insight, Enverus, SGX, TSI

Two opposing forces appear to be pinning the price in place. On one end, demand sentiment has clearly softened in China. Chinese steel PMI readings have stayed in contraction for months, and the property sector continues to weigh on construction steel demand. This is the kind of backdrop that would normally drag imports towards the bottom, but deteriorating ore grade in China and surplus buying have kept import momentum going.  Chinese imports are expected to surpass 1.3Bt for the first time this year. This is now more of a supply story as production pace and inventory levels are high, putting overall downward pressure on prices. On the other end, freight rates have helped keep benchmarks higher.

A third factor of growing importance is now playing out. Ongoing miner negotiations with China Mineral Resources Group (CMRG) has reshaped term supply contracts and split negotiations into distinct, sometimes competing, index camps. Chinese steelmakers reportedly view CMRG as a comparatively fair counterparty, and the entity has become the single most consequential actor in a market that used to be priced almost mechanically. Estimates indicate it handles anywhere between >60% of China’s iron ore imports.

Overall, downside pressures outweigh the upside, keeping prices just under $100/t through H2 2026.  A sustained recovery above $100/t would likely require an improvement in Chinese manufacturing and construction activity, a slower Simandou ramp-up, or meaningful supply disruption. Hormuz remains a key monitorable from a freight perspective.

The structural transition to a multipolar indexation

CMRG interplay plausibly explains some of the band-narrowing. Each standoff injects a short, policy-driven supply-risk premium that offsets the weak demand and stops the price from testing new lows. Each resolution removes that premium and caps the upside before it runs far. It is a different mechanism from the classic seasonality story - restocking cycles, weather, port congestion. The result is a market with a soft floor and, so far, nothing forceful enough to punch through it.

At the centre of the negotiations, are the “Big Four” miners still supplying more than two thirds of China’s iron ore imports. For major producers with established relationships with large Chinese buyers, this dynamic reinforces their competitive positioning against smaller or newer suppliers. That said, the “Big Four” share of China's imports has quietly slipped to a decade low as Beijing spreads its buying further afield. But the volume tonnage remains highly substantial.

Miner/CMRG negotiation summary

Source: Kpler Insight, Company Reports

“Big Four” share of China imports (Mt, %)

Note: Rio Tinto volumes exclude IOC shipments. Vale figures include shipments coming in through their distribution centre in Malaysia.

Source: Kpler, Kpler Insight

BHP becomes first of the “Big Four” to adopt COREX in its iron ore pricing formula

Following a contractual dispute that led to temporary Chinese procurement restrictions on some of its cargoes, BHP settled with CMRG in April 2026. China continued to import BHP products during the company’s pricing dispute with CMRG. Jimblebar Fines are now a weighted average of four seaborne and portside indices (COREX 61% Portside, Argus 61% Seaborne, Mysteel 61% Seaborne, Mysteel 61% Portside). Just over half of the product is now priced through China's yuan-denominated portside index, converted to US dollars, alongside a 1.8% rebate per vessel on term contracts. Platts continues to dominate the benchmark for its other products, but it gives CMRG a template it has already tried to apply elsewhere.

The playbook spreads to FMG

Fortescue shifted to a temporary pricing using an average of China’s Mysteel index and the Argus Iron Ore Index for its products, while its higher-grade Iron Bridge concentrate is priced against the Platts 65% index. Starting 15 July, CMRG has placed buying restrictions on Super Special Fines (56.5% Fe) and Fortune Fines (55.0% Fe). A similar playbook to the one it ran with BHP last year. So far, the impact looks contained. China’s daily imports from Anderson point have only slightly fallen, with the last Super Special Fines discharge on 16 July even as FMG continues to discharge some of its other products. The early strain is showing up elsewhere, though a handle of vessels waiting outside Chinese ports, a small but early signal worth watching if the standoff runs as long as BHP's did.

Other negotiations are a mixed bag

• Long reliant on the Platts index, Rio Tinto agreed in late 2025 to trial the Fastmarkets 61% Fe Fines Index under CMRG pressure. It held off adopting Beijing's COREX index directly, citing its short data history and portside only methodology.
• Vale has utilised CMRG to sell cargoes on the spot market, helping optimise output and distribution. As of now, the miner has no long-term contracts or fixed price arrangements with the Chinese entity, maintaining instead a flexible, market-based sales structure. Vale maintains a different pricing strategy due to its premium, high-grade ore and pellets with negotiations reportedly based on pricing data published by Fastmarkets.
• After more than a year of restricted sales where Chinese buyers were pressured to avoid Hancock’s Roy Hill fines on the spot market, CMRG and Hancock resolved their dispute, with CMRG securing exclusive sales rights.
• CMRG is reportedly discussing becoming an exclusive sales agent for some cargoes from Brazil's CSN Mineração, echoing an earlier arrangement with Australia's Roy Hill, a step that would put China's buyer inside the transaction flow itself, not just at the negotiating table.
• Kumba Iron Ore (Anglo American) is also in contract talks with CMRG, with deal expected later in the year.

What it means going forward

Where this settles in a difficult question. The market could converge on one dominant multi-index standard that most miners eventually adopt, or stay fragmented, with each producer running its own basket depending on how its CMRG negotiations go. Can COREX itself become the de facto reference for China-bound cargoes over time given how hard CMRG has pushed for its adoption elsewhere?

Underlying all these scenarios is a more basic split that hasn't gone away: a dollar-priced, seaborne-index world for the rest of the market, against a yuan-priced, portside-index world that China is trying to build for itself. Whether those two systems converge, coexist, or pull further apart is arguably the bigger story than any single miner's contract terms. Switch from annual pricing anchored to Platts average to a quarterly, spot-linked price basket favour Chinese buyers on the commercials and is likely to have an impact of miner revenues.

Going ahead, we expect mid-tier miners' negotiating leverage to shrink even as China's exposure to their volumes grows. West and Central African iron ore projects are widely seen as the long-term route for Chinese buyers looking to reduce their reliance on Australian and Brazilian suppliers, and Guinea's Simandou is the clearest example in motion. Please see the latest Iron Ore Balances dataset for an Excel file detailing our 18-month ahead forecasts for major iron ore importers and exporters, crude steel production forecasts, quarterly projections for major miners, and iron ore price forecasts.

In the near term, negotiations will lead to a fragment basket of indices, one that works for both CMRG and the miners. Portside prices move on administrative pressure rather than physical supply and demand, which has been a key pain point for miners in these negotiations. So, it is unlikely that the portside COREX index will gain complete popularity. BHP's 51% Jimblebar fines deal is a symbolic first, not a wholesale shift. While we expect to see more miners opt for yuan dominated indices into their basket, dollar dominance remains entrenched for now.

High-grade producers look set to keep the upper hand. Even as the benchmark 61% Fe price is forecast to drift lower through 2026 and into 2027, the premium for high grade ore will hold up.

Iron ore price premiums ($/t)

Source: Kpler Insight, Enverus, SGX, TSI

Vale and ABB have signed a strategic alliance with the aim of expanding the use of automation and artificial intelligence (AI) technologies to increase safety, productivity and sustainability in mineral production in Brazil. It follows the inauguration of one of the most advanced iron ore processing plants in the industry, Vale’s Conceição II Model Plant in Itabira, Minas Gerais.

The model will serve as a reference for the technological evolution of other Vale units, with the mining company planning to expand the application of automation, artificial intelligence and digitalization. The initiative is the result of the expansion of the partnership between Vale and ABB and will gradually replicate the technological solutions implemented at the Itabira plant in other iron ore processing plants. Vale’s aim is to increase the safety of operations, improve operational performance and raise the quality of production.

Inaugurated in June this year, the Conceição II Model Plant represents one of the main projects of Vale's Mining of the Future strategy. ABB acted as consultant, systems integrator and technology provider in the partnership, cooperating on the development, validation, interoperability and scalability of advanced industrial automation, digitalization and integrated IT/OT technology solutions, aiming at the optimization, security and sustainability of operations.

More than 100 monitoring cameras were installed across the 11.2 Mt per year complex, along with the automation of more than 7,000 instruments, including new advanced measurement devices and sensors. Data intelligence is also used to control, manage and optimize more than 400 variables across all stages of the ore processing workflow. Operating flows were also reviewed to anticipate failures and avoid unplanned shutdowns.

The results from Conceição II demonstrated the potential of digital transformation in mining. Since its implementation in 2024, the plant has recorded a 25 percent increase in productivity, a 40 percent growth in the production of premium ore for direct reduction, and a 26 percent reduction in iron losses in the tailings. The new configuration also reduced the need for manual interventions in the field, contributing to a safer operation for employees.

Now, with the unit serving as a blueprint for expanding the model to other company operations, Vale and ABB have signed a strategic alliance to bring forward their shared vision of driving productivity, safety, energy efficiency, digitalization and sustainability across operations.

“The Model Plant Project has shown that new technologies, such as artificial intelligence, improve employee safety and increase productivity, operational efficiency and quality in mining,” said Carlos Medeiros, Vale's Vice President of Operations. “Now, we are going to take this learning to other Vale operations, increasing the predictability of processes, improving the use of mineral resources and reducing people's exposure to risky activities. The initiative reinforces our new way of operating, which is increasingly safe, sustainable and data-driven, strengthening our competitiveness and preparing us for the challenges of the future.”

“This new agreement with Vale represents an important milestone in our partnership,” said Joachim Braun, President of ABB's Process Industries Division. “Building on the success achieved in Conceição II, we are creating a framework to deploy a consistent approach to automation, electrification and digitalization across multiple operations.”

ABB is a global technology leader in electrification and automation, enabling a more sustainable and resource-efficient future. By connecting its engineering and digitalization expertise, ABB helps industries run at high performance, while becoming more efficient, productive and sustainable so they outperform. At ABB, we call this ‘Engineered to Outrun’. The company has over 140 years of history and around 110,000 employees worldwide. ABB’s shares are listed on the SIX Swiss Exchange (ABBN) and Nasdaq Stockholm (ABB). www.abb.com

ABB’s Automation business automates, electrifies and digitalizes industrial operations that address a wide range of essential needs – from supplying energy, water and materials, to producing goods and transporting them to market. With its ~26,000 employees, leading technology and service expertise, Automation helps process, hybrid and maritime industries outrun – leaner and cleaner. go.abb/automation

Today, however, the industry is undergoing a fundamental transformation. Increasingly, competitiveness is no longer defined solely by engineering perfection — but by the ability to innovate faster. The rapid rise of Chinese manufacturers is accelerating this shift and forcing European industry to rethink established business models.

China’s Rapid Expansion in Global Mechanical Engineering

China has evolved from a low-cost manufacturing hub into a technologically competitive industrial powerhouse. Recent market data shows how dramatically global market shares are changing.

With machinery exports reaching approximately €735 billion in 2024, China surpassed Germany for the first time as the world’s largest machinery exporter. Growth has been particularly strong in Europe: Chinese machinery deliveries to European markets increased by nearly 87 percent between 2020 and 2024.

Chinese suppliers are gaining ground not only through pricing advantages but also through advances in key future technologies, including:

• industrial robotics
• laser processing systems
• CNC machine tools
• automation and smart manufacturing solutions

This development marks a structural shift rather than a temporary market cycle.

Understanding “China Speed”: Faster Innovation Cycles as a Competitive Advantage

A central driver behind China’s industrial success is what many analysts describe as “China Speed.”

Unlike traditional European development models, which often follow sequential stages from research to production, many Chinese companies operate with parallel processes. Product development, manufacturing preparation and customer testing frequently occur simultaneously. This agile approach delivers several advantages:

• significantly shorter product development timelines
• faster market launches
• rapid integration of customer feedback
• continuous product iteration

In markets shaped by digitalisation and automation, speed has become a decisive differentiator.

From Engineering Perfection to “Good Enough” Solutions

Global customer expectations are also changing. In many industrial applications, buyers increasingly prioritize availability, flexibility and cost efficiency over maximum technological sophistication.

Chinese machinery often follows a “fit-for-purpose” philosophy: machines deliver sufficient performance for specific applications at highly competitive prices. In some segments, equipment from China is 30 to 70 percent cheaper than comparable European solutions while meeting operational requirements in practice.

For European manufacturers, this represents a major strategic challenge. Traditional strengths, complex engineering processes, extensive customization and perfection-driven development, can slow response times in fast-moving markets.

Declining order volumes and restructuring measures across parts of the European mechanical engineering sector suggest that the industry is facing a long-term transformation rather than a short-term downturn.

How European Mechanical Engineering Companies Are Responding

European companies are already adapting to the new competitive environment through several strategic initiatives:

1. Localization of Development and Production

Manufacturers increasingly establish regional engineering and production capacities in major growth markets such as China and Southeast Asia to shorten decision cycles and improve customer proximity.

2. Modular Product Platforms

Standardized machine platforms allow faster configuration, reduced costs and shorter delivery times while maintaining quality standards.

3. Digitalization and Software Integration

Software, artificial intelligence and data-driven services are becoming central competitive elements. Digital solutions enable faster upgrades and continuous performance optimization without complete hardware redesigns.

4. Balancing Speed and Quality

Companies are reassessing the balance between engineering perfection and market responsiveness, developing differentiated product strategies for premium and high-speed market segments.

Europe’s Strengths Remain but Adaptation Is Essential

Despite intensifying competition, Europe continues to benefit from deep industrial expertise, advanced research capabilities and strong engineering traditions. These advantages remain valuable foundations for future growth.

However, success will depend on combining technological leadership with faster innovation cycles, leaner processes and greater strategic flexibility.

The Future of Mechanical Engineering: Quality Alone Is No Longer Enough

Global mechanical engineering has entered a new competitive era. The decisive question for European industry is no longer whether it can produce the best machines but whether it can deliver innovation at the pace demanded by global markets.

In the emerging industrial landscape, speed, adaptability and technological intelligence will determine who leads the next generation of manufacturing.

Beginning later this month, certain battery scrap and tungsten waste in the U.S. must be sold domestically, according to a Department of Commerce rule published on the Federal Register. The ban will be in effect for a year.

The move comes as the U.S. and other Western governments race to secure the raw materials that are crucial for defense and other industries, but are largely controlled by China. Beijing began throttling exports of some of those materials in recent years, raising global alarm.

Tungsten is a chemical element that is used in tank armor, weapons and engine components because of its high strength and heat resistance. China is the world’s largest producer of tungsten, according to the United States Geological Survey, and has included the element in its export restrictions.

Lithium-ion battery scrap—often referred to as black mass—contains lithium and other critical materials such as cobalt, nickel, manganese and graphite. Those materials can be recovered from black mass through recycling processes such as chemical processing or smelting.

The Federal Register notice said President Trump had determined that a shortage of critical materials posed a growing national defense and security risk. The new restrictions are necessary “to ensure an adequate supply of these materials deemed essential to the national defense,” the notice said.

Exemptions could be granted in certain cases, including if the materials are exported for processing or refining elsewhere and then returned to the U.S.

The U.S. is already spending heavily in a bid to kick-start non-Chinese supply chains for critical raw materials. It has negotiated preferential access to mineral wealth in war-torn countries, and is offering financing for critical-materials projects in which foreign entities supply American companies.

In another move aimed at curbing U.S. reliance on China, the Defense Department has ordered contractors to remove Chinese rare earths from their supply chains for magnets by next year.

Write to Kim Mackrael at kim.mackrael@wsj.com

The trading division of Chinese copper giant CMOC Group Ltd. is expanding into the iron ore market. IXM SA, a subsidiary of CMOC, has signed a prepayment agreement with Brazilian mining company Itaminas Comércio de Minérios SA in exchange for guaranteed long-term supplies of raw materials. This arrangement involves paying in advance for future deliveries, with interest payable on the funds used. This was reported by Bloomberg.

This agreement marks IXM’s first foray into the iron ore sector. It is in line with a general trend among leading global traders, such as the Vitol Group and the Trafigura Group, which are actively expanding their portfolios of metallurgical raw materials through prepayment arrangements.

Iron ore producers are increasingly turning to private investors and trading houses for financing as global commodity prices fall below the $100 per tonne mark.

IXM, a company headquartered in [location], which was previously a subsidiary of the agribusiness giant Louis Dreyfus Co., was acquired by CMOC in 2019. In recent years, the trader has scaled back its third-party operations in lead and zinc, focusing instead on marketing its parent company’s products — notably copper and cobalt. CMOC owns the Tenke Fungurume deposit in the Congo – the world’s second-largest copper mine.

IXM is currently headed by Branko Buhavac (a former trader at Mitsubishi and Trafigura), who succeeded Kenny Ives as the company’s CEO and CMOC’s commercial director. The Chinese group is also steadily expanding its presence in Brazil: in addition to mining niobium and phosphates, last year CMOC agreed a deal to purchase local gold-bearing assets worth $1 billion.

As reported by GMK Center, iron ore production in China for the first six months of 2026 fell by 7% compared with the same period in 2025, to 466.9 million tonnes. The decline accelerated significantly in June, when production volumes fell by 19.8% year-on-year to 70.4 million tonnes, marking the lowest monthly level on record.