Category Insights & Outlook 2023





The metals market remains highly volatile in the face of multiple macroeconomic pressures. On the supply side, multiple geopolitical issues and natural disasters have disturbed supply chain logistics.

On the demand side, widely incorporated ESG practices have affected the manufacturing industry, and potential economic recessions could lower consumer demand and therefore impact the demand for metal from Manufacturing.

Future outlook

With inflation for base metals hitting -19% in August 2022, it is anticipated that the downward trend will continue into 2023, reaching an expected -12%, according to the International Monetary Fund.

Short term outlook

  • Aluminium prices will stabilise as Europe responds to the energy crisis, with the aim of a 15% reduction in industrial natural gas usage by Q3/Q4 2023. This is likely to be achieved by the lowering of industrial activity and a slowdown of primary Aluminium consumption. 
  • It is expected that the price of Copper will increase and return to the pre-COVID-19-pandemic growth trend. This is likely due to reinforced health restrictions in China as well as limiting supply while the consumption of this metal continues to grow. 
  • These continued restrictions will likely also impact Tin prices, leading to their decrease due to reduced demand. 
  • Steel and Cobalt prices will be impacted by the recession in Europe and the associated decrease in consumption of end-products and reduction of construction projects.  

Medium term

  • We expect prices for Aluminium to decrease once China overcomes the COVID-19 pandemic outbreak, and the supply will normalise, reducing a supply shortage.​
  • It is likely that prices for Nickel will stabilise and potentially decrease in the mid-term as any increase in demand from resumed production in China, and a surge in demand for batteries will be mitigated by capacity expansion projects in Indonesia.​
  • Tin prices are likely to continue to fall as factories in Malaysia are expanding their production, meeting the growing demand from solar panels production and 5G rollout.​
  • We predict that Copper prices are likely to go down as new mining facilities are planned to be opened in Congo and Peru, and two mines in Chile are boosting their production6, meeting the growing demand from a recovering world economy, the surge of electric vehicles (EVs), and infrastructure development.​
  • We estimate that prices for Lithium and Cobalt will stabilise as the upward trend in demand will continue for various batteries and energy storage systems. This increased demand is anticipated following recovery from recession and the overcoming of supply shortages from China, with supply contracts secured in Australia and South America.​

Dos, Don'ts, and Best Practices

  • Consider renegotiating prices for certain metals.​
  • Run an impact assessment and estimate exposure and dependencies.​
  • Prioritise initial supply continuity and consider inventory / planning levers.​
  • Look for alternative suppliers (new locations) to limit exposure.​
  • Treat this as an opportunity to optimise, reduce, and innovate.​
  • Pass through costs where possible.​
  • Do not accept increases; determine if they are justified, and agree on the conditions for accepting them.​
  • Do not rush – assess risks, opportunities, and create short-, medium-, and long-term strategies.​
  • Do not treat the category in silo; see it as part of total spend basket.​
  • Do not think you can't break a contract – breaking and paying a penalty can be better.​


  • Understand the price breakdown:
    • Create full transparency across your procurement costs and supply chain impacts.
    • Arrive at a position where "should cost" analysis can be performed.


  • Ensure supply and prepare mitigation:
    • Confirm exposure and priorities.
    • Ensure supply.
    • Thoroughly prepare for negotiations with business-critical supply partners.


  • Manage volatility impact and boost resilience:
    • Review long-term procurement strategy.
    • Ensure the right capabilities.
    • Explore risk management strategies.

Key takeaways

  • Renegotiate pricing with the key suppliers as the prices for several metals will be going down.​
  • Negotiate longer term contracts with suppliers to mitigate future supply shortages.​
  • Consider restructuring the supply base by going regional or exploring suppliers in the regions with expanding production capacities that will reduce total cost and improve supply chain agility.
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Category Insights & Outlook 2023

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How Efficio can help

If your business is or has been impacted by any of these trends, or you would like to dive deeper into the outlook and associated guidance for any of the above categories, our SMEs are available to help.

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