Our global steel and mineral markets are seeing fundamental transformations as new geopolitical and economic forces emerge and collide. Recent developments include China’s pressure on Myanmar rebels regarding rare-earth supply security, Vietnam’s end to a long-standing gold trade monopoly, and challenges facing the U.S. steel industry following an explosion at a manufacturing facility.
To protect this crucial supply, China has upped its game, recently by making threats to Myanmar rebels. This decision comes as worries are heightening that stability of supply chains so necessary for the manufacturing of technologies, including semiconductors. The presence of rare-earth elements—now critical components in everything from televisions to defense technology—really put China’s strategic-resource chic in the spotlight.
In a crucial policy shift, Vietnam ended its 13-year government monopoly on the gold trade and production. With this decision, the market will be opened to private investors and foreign companies. For one thing, we should all look forward to a significantly more competitive and transparent sector. Analysts expect the move will lead to greater flexibility in a gold market that has been tightly controlled in Vietnam. This development will increase the market’s attractiveness to investors.
U.S. Steel is already struggling badly after new owners Nippon Steel took the helm. This follows a grim recent history that includes a recent explosion at one of its facilities. This occurrence raises key issues to operational safety and management effectiveness as Nippon Steel continues through its merger into the company. The recent explosion has put U.S. Steel’s facilities resilience to the test. What it hasn’t done is effectively address the broader safety issues that plague the industry.
U.S. steel prices have already declined 10% from their high earlier this year, as weakening demand combines with soaring domestic production to drive down prices. Illegal steel imports from China started flooding in, deepening the nosedive. As a consequence, Japanese steel prices have fallen to a four-year low. Chinese steel is pouring into Japan’s domestic market. Because of this, South Korea’s steel industry has had a difficult time adapting to increased competition from China and the trade measures the Trump administration enacted in the U.S.
Over in Australia, Lynas Corporation is making major moves to fill the growing global demand for rare-earth materials. They’re currently raising $488 million to fund their seed expansion plans in Malaysia. This investment is a clear indication of Lynas’s commitment to ensuring its competitiveness in the global supply chain. This is especially true given rising competition and geopolitical tensions surrounding rare-earth access.