10 Worst-Performing Industries in 2024

5. Mining and Metals (Excluding Precious Metals)

iShares MSCI Global Metals and Mining Producers ETF (PICK): -5.62%

The mining and metals industry (excluding gold and silver) is in rough waters, with MSCI Global Metals and Mining Producers ETF (PICK) down by 5.6% YTD. PwC’s Mine 2024: 21st edition report shows the top 40 mining companies had an overall revenue and net income decline of 7% and 44%, respectively, in 2023, even as they increased production. This was on the back of falling commodity prices, softening demand in advanced economies and China and increasing operating costs. These trends have persisted so far in 2024 and are expected to continue.

The operational costs are increasing primarily because of fuel and power costs, in addition to the environmental regulations worldwide because of the mining industry’s environmental impact.

Long term, the industry’s challenge is urban mining. Given the sustainability initiatives around the world and consumers’ increasing awareness of their consumption’s impact on the environment, the future of commodities appears to be circular. In this regard, mining companies are adapting their business models to recycling, with a recent example being Rio’s 2023 purchase of a 50% stake in Matalco Inc, an aluminum recycler.

In the wake of interest rate policy easing in the US and other countries, the major global engines of growth are expected to increase demands for metals like copper, aluminum, and iron, among others.