ABB: 2025 Will Be A Balancing Act for Metals Manufacturers

In the November issue of Manufacturing Digital Magazine, we shared our top 10 manufacturing predictions for 2026.

But right now most manufacturers are focused on the near future and what the sector will look like in 2025. 

One such manufacturer is ABB, with Fred Esterhuizen, Global Business Line Manager for Metals, ABB Process Industries sharing some compelling thoughts on the future for metals manufacturers.

"2025 will be a year of balancing acts for metals manufacturers," he says.

"As electric arc furnace usage rises globally and scrap recycling becomes more important and prominent, industry players must juggle regional demands, new tech and a pressing skills gap to continue to fuel sustainable, shared growth."

Indeed, the global metals manufacturing industry needs to embrace itself for a challenging year in 2025. 

They will need to navigate a precarious balance between supply, demand, technological transformation and sustainability amid turbulent geopolitical changes and economic fluctuations.

Expanding on this, here are the six key areas metals manufacturers will need to maintain the most balance within next year. 

1. Shifting supply chains

The reshaping of global supply chains will be a critical factor for metals manufacturers in 2025. 

Geopolitical tensions including the invasion of Ukraine and increased US tariffs on Chinese trade have and will continue to disrupt the flow of critical raw materials like steel, nickel and aluminium. 

Manufacturers have sought to diversify sourcing to combat this, but this diversification introduces further challenges like logistical complexities and higher trading costs. 

Meanwhile, the rise of nearshoring and reshoring in North America and Europe is also impacting global supply chains. 

The subsequent investment in local production facilities bolsters supply chain resilience, but also requires a skilled workforce and significant capital that creates regional strain. 

2. Balancing economic uncertainty

2025 brings with it an uncertain economic future, with many countries balancing economic growth with inflation control. 

Metals manufacturers will have to adapt to fluctuating demands and costs across key industries including automotive, construction and aerospace.

An example of this is the automotive industry's transition to EVs.

This transition has increased demand for lightweight materials like speciality alloys and aluminum, but has also exposed manufacturers to volatility in EV adoption rates and associated material requirements.

Construction activity can also vary widely according to region, shaped by slower growth in emerging economies and increased infrastructure spending in developed markets.

This will require metals manufacturers to remain agile, diversifying their customer base and leveraging demand forecasting tools to mitigate risk

3. Sustainability pressures

ESG will continue to dominate the agenda of the metals industry in 2025.

The pursuit of economic circularity is driving innovation in metals manufacturing and recycling, leading manufacturers to recover valuable materials like copper and steel and reducing their dependency on virgin resources.

Recycling will only increase as governments worldwide tighten regulations, making adopting cleaner production methods an absolute necessity.

A key example of this is the European Union’s Carbon Border Adjustment Mechanism (CBAM), which penalises high-carbon imports and creates a vital economic incentive for metal manufacturers to adopt greener processes. 

These greener processes look like transitioning to electric arc furnaces or using hydrogen in steelmaking, shifts which require substantial planning and investment. 

Having the capital for this is a small or medium-sized manufacturer can pose a challenge. 

While larger players have the money, they also face mounting scrutiny and pressure from vital stakeholders to meet decarbonisation targets.

4. Technological transformation

Like all industries, metals manufacturers are adapting to the incredible impact of Industry 4.0. 

Technology is reshaping the sector, creating new opportunities for innovation and efficiency.

Advanced analytics, AI-driven predictive maintenance and IoT-enabled equipment are helping companies optimise production, reduce downtime and improve quality.

The challenge of implementing these technologies at scale will persist in 2025, requiring substantial training and infrastructure investment. 

As the digital skills gap grows, manufacturers across the sector need to come together to strategise on the future.

How can we build a future workforce trained to best operate and maintain high-tech manufacturing systems?

5. Market Volatility in Key Inputs

Coming back to the supply chain, metals manufacturers will need to contend with market volatility. 

Volatile prices for key inputs including coal, iron ore and rare earth materials is going to make 2025 a challenging year for cost management. 

Due to the rise of EVs and renewable energy technologies, demand for materials like cobalt, nickel and lithium has never been higher. 

Competition for these resources will intensify, pushing prices higher. 

Metals manufacturers will need to adopt hedging strategies and explore alternative materials where possible to mitigate exposure to price fluctuations.

6. Collaboration and Innovation

Finally, metals manufacturers will need to balance collaboration and innovation. 

Navigating 2025's complexities will be dependant upon collaborative efforts, including partnerships between metals manufacturers, governments and technology providers. 

Together the sector can accelerate the adoption of cleaner technologies and ensure a stable supply of raw materials. 

Innovation is also fuelled by collaboration.

The recent developments we've seen, including the creation of lightweight composites and advanced alloys that could open brand new applications and markets is thanks to industry-wide cooperation. 

Indeed as Fred says, 2025 will be a year of balancing acts for metals manufacturers. 

From critical inputs to technological advancement to sustainability, manufacturers in this sector have to be especially agile and strategic.

The only way to do this and balance the uncertainty and disruption of the road ahead is together, through shared collaboration, innovation and investment. 

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