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★Mark us as a preferred sourceThe global materials industry closed 2025 with one of its best years of the past decade – at least on paper. McKinsey’s 70-page Global Materials Perspective 2026, published on 13 October 2026, also shows what sits behind the record numbers: profits came almost entirely from soaring gold and copper prices, output and productivity stood still, and scrap quietly became one of the new flashpoints of geopolitics. For the waste management sector, that last point is the report’s most important message.
In short: The global materials industry posted record profits in 2025, but they were driven almost entirely by higher gold and copper prices while volumes and productivity stagnated. According to McKinsey, efficiency will be the key question in the coming years, and for waste management the headline is that scrap has become a strategic raw material facing a growing web of export and import restrictions.
A record year with almost no growth in output
The report covers four sub-industries – metals and mining, building materials, plastics, and pulp and paper – with a clear focus on metals and mining. Total materials revenue grew by just over 1 percent in 2025 to roughly $6.6 trillion: the decline in building materials was offset by growth in pulp and paper, metals and mining, and plastics. That made 2025 the sector’s fourth most profitable year in two decades – and all four of those peak years fall within the last five.
The financials of metals and mining are even more striking. The average EBITDA margin reached 27 percent in 2025 (up from 19 percent in 2015), sector EBITDA exceeded $800 billion, and market capitalisation climbed to a record $3.7 trillion, an increase of around 230 percent since 2015.
Beneath the surface, the picture is far less impressive. Metals and mining revenue rose by only about 1 percent to $3.1 trillion, volumes were essentially flat, labour productivity did not improve and capital productivity declined. Margin expansion came almost entirely from a shift in the revenue mix towards higher-margin commodities.
Gold rush and copper rally: where did the value go?
Three metals shaped the change in 2025 revenue. Gold rose by 45 percent, driven mainly by central bank purchases and investors seeking safe assets. Copper gained 9 percent and climbed above $13,500 per tonne by mid-2026, pushed by data centre build-out, electrification and mine supply disruptions. Aluminium rose by 6 percent and jumped above $3,000 per tonne by mid-2026 after the closure of the Strait of Hormuz disrupted the supply chain of roughly a tenth of global volumes.
By contrast, steel prices fell by 9 percent and thermal coal by 19 percent – the former due to the slowdown in Chinese construction and global overcapacity, the latter as prices continued to normalise after the 2022 peak. Battery material prices also declined, but the impact was limited because these materials account for only about 5 percent of industry revenue.
The shift in value is a long-term trend. In 2021, the steel value chain (including iron ore and metallurgical coal) and thermal coal still accounted for 65 percent of industry revenue; by 2025, that share had fallen to 49 percent. In 2025, gold overtook steel and thermal coal in the EBITDA pool for the first time, generating 28 percent of total industry EBITDA. Capital markets mirrored this: between 2015 and 2025, total shareholder returns grew 8.1-fold for gold producers, 6.3-fold for copper and 5.7-fold for coal, but only 2.2-fold for nickel producers.
Tariffs, conflicts and diverging metal prices
According to the report, governments increasingly treat materials as a strategic matter. Supply concentration rose by three percentage points in both mining and refining between 2020 and 2025, and value is migrating upstream: mining and concentrate production are capturing more margin, while smelting and processing margins are being squeezed. McKinsey argues that announced diversification plans will only materialise if incentives for refining and processing keep pace with, or exceed, those for mining.
Physical vulnerability amplifies political risk. When the conflict around the Strait of Hormuz cut Gulf sulphur exports, sulphur prices spiked, raising the cost of the sulphuric acid used in refining and squeezing already thin processing margins. Governments are responding with strategic stockpiles, regional sourcing and direct state involvement: the United States has taken equity stakes and offtake agreements in rare earth and critical mineral producers, while the European Union has designated an initial 60 Strategic Projects under its Critical Raw Materials Act, 47 of them within the bloc.
Tariffs, meanwhile, have pulled previously unified metal prices apart. The US aluminium tariff rose to 50 percent in June 2025, pushing US prices above $6,200 per tonne by mid-2026 and, at the peak, more than 60 percent above Chinese prices. In steel, Chinese overcapacity keeps prices low, while tariffs sustain regional premiums in Europe and the United States. Downstream industries pay the bill: between February 2025 and June 2026, a US-built C-class battery electric vehicle faced more than $1,200 in additional materials costs compared with its Chinese equivalent, and for a comparable combustion-engine car steel, copper and aluminium alone added more than $900.
Scrap has become the new strategic raw material
For the recycling sector, this may be the report’s single most important finding: every metal with a mature recycling market now faces trade restrictions in multiple jurisdictions. The logic is simple. For a country that depends on material imports, domestic scrap is a cheaper and lower-carbon alternative to primary metal, so holding it back reduces both import dependence and emissions. The economics, however, depend on scrap quality: the lower the grade, the higher the processing cost.
McKinsey distinguishes two groups. The European Union, the United States, Japan and Russia restrict outbound scrap flows through duties, licences, quotas, government orders and bans. China, Türkiye and India – historically the world’s largest scrap importers – are narrowing imports to higher-quality grades through purity thresholds, duties and licensing; China, for example, requires at least 97 percent purity for copper scrap and at least 91 percent for aluminium scrap.
Several of these measures will already be familiar to dontwasteit.hu readers. Invoking defence legislation, the United States now requires the entire volume of black mass to be sold domestically, as we explained in detail in our analysis of the US black mass export restriction.
Washington has also proposed a 25 percent domestic sales requirement for copper scrap, though without an implementing rule it is not yet in force. From May 2027, the EU Waste Shipment Regulation will only allow non-hazardous waste exports to non-OECD countries – including steel, aluminium and copper scrap – to approved destinations; the Commission published the draft list of eligible countries in September 2026.
Brussels did, however, step back from the export duty on aluminium scrap that had been under discussion, a move welcomed by Recycling Europe. Russia is tightening through quotas and export duties, and Japan through scrap-yard permit rules to be introduced by 2028.
According to the report, this trend puts pressure on recyclers that rely on imported scrap. McKinsey also points out that innovation could usefully target the processing and upgrading of lower-quality scrap streams – precisely where the largest losses occur today.
Where demand is heading: data centres, India and less China
In McKinsey’s base case, demand for most commodities remains resilient through 2030, with coal, steel and iron ore, and platinum group metals as the exceptions. The outlook for battery materials was revised down because of slower electric vehicle adoption, yet they remain among the fastest-growing materials, at 5 to 11 percent a year to 2035. Paradoxically, the slower transition has improved the outlook for the platinum group metals used in combustion-engine catalytic converters.
New sources of demand are emerging. Global data centre capacity could grow by roughly 25 percent a year, from 84 gigawatts in 2025 to nearly 600 gigawatts by 2040. Data centres still account for less than half a percent of industry revenue, but for some commodities their weight will be considerable: by 2030 they could represent around 6.2 percent of gallium demand, 4.3 percent of copper demand and about 2.5 percent each of germanium and rare earth demand. Rising defence spending is another new driver – we covered the background in our article on the global mineral rush.
The geography is shifting too. China’s share of global metals revenue peaked at around 48 percent in 2020, fell to about 42 percent by 2025 and could drop to 38 percent by 2035, mainly due to the construction slowdown. India, with about 10 percent of global metals revenue, is already the second-largest market and among the fastest-growing.
Missing capital, missing people
Long-term supply gaps have narrowed compared with last year’s report – partly because of the slower energy transition, partly because of newly announced projects – but they have not disappeared. By 2035, deficits of about 10 percent are expected for copper, more than 20 percent for rare earths and 10 to 20 percent for nickel, with shortfalls also expected for silver and manganese. Silver scarcity is a particularly sensitive issue for the solar industry, which is why silver and silicon recovery from solar panels is gaining importance.
Closing the gap over the next decade would require an estimated $4.2 trillion of investment in mining and processing. Yet capital is becoming less productive: megaprojects routinely overrun their budgets, grassroots exploration delivers weak returns, and fewer than five major copper or gold discoveries were made per year on average over the past decade. The money sitting on balance sheets is not turning into tonnes fast enough.
The talent shortage has not eased either. China’s metals and mining workforce could shrink by around 450,000 full-time equivalents by 2035, while India’s could grow by about 430,000, leaving a net global need of more than 310,000 workers. Meanwhile, the pipeline is drying up in mature markets: between 2011 and 2021, the number of mining graduates fell by about 75 percent in Australia and 40 percent in the United States.
A $450–750 billion productivity reserve
After a modest post-Covid recovery, mining productivity stalled again in 2025, even as capital spending and M&A picked up and margins stayed high. Unit costs for copper, gold and iron ore have risen by 28 to 36 percent since 2020, outpacing the 24 percent increase in the US Consumer Price Index.
McKinsey estimates that metals and mining hold an annual productivity potential of $450 to $750 billion – equivalent to 15 to 25 percent of industry revenue – if proven solutions were adopted at scale. The largest share comes from operational excellence ($300–475 billion: throughput, recovery and cost improvements such as autonomous haulage), followed by procurement ($75–150 billion) and better capital planning ($75–125 billion). The global autonomous haulage fleet has roughly tripled in two years, but rollout is uneven: China already accounts for more than half of all operating fleets.
An important caveat is that not all of this potential would reach the bottom line, since widespread adoption would also affect cost curves, supply and therefore prices. The message is nonetheless clear: once commodity prices normalise, efficiency may become the main source of margin growth.
Emissions: a slow decline and a growing role for secondary materials
Greenhouse gas emissions from metals and mining fell by about 1 percent in 2025, but mainly because of lower steel output rather than technology change. Steel accounts for 38 percent of the total, thermal coal for 30 percent and aluminium for 15 percent. McKinsey expects only an 8 percent reduction by 2035, from about 7,110 to roughly 6,580 million tonnes of CO₂ equivalent per year. Most of the decline comes from grid decarbonisation and efficiency gains, with higher recycled shares and announced net-zero projects contributing the remainder.
Green investment momentum has faltered in Europe and the United States: according to the report, around 20 million tonnes per year of planned European green steel capacity has been paused, postponed or cancelled because customers are not willing to pay a premium for lower-carbon materials. At the same time, the EU’s Carbon Border Adjustment Mechanism (CBAM) has entered its definitive phase and now puts a price on the emissions embedded in imported steel, aluminium and other materials.
In this picture, scrap offers a double advantage: it is often the cheapest and lowest-emission source of metal. For aluminium, remelting requires only a fraction of the energy needed for primary production – as we showed in our article on the energy balance of aluminium recycling. McKinsey therefore sees higher collection and recovery rates, together with innovation in processing steel, aluminium and battery materials, as a meaningful accelerator of decarbonisation.
What does the reshaping of the global materials industry mean for waste management?
From a professional standpoint, the report’s key lesson is that scrap has left the “by-product” category for good. The global materials industry now treats secondary raw materials with the same logic it applies to critical minerals: as a question of supply security, trade policy and national security. This has three practical consequences.
The first is quality. If major importers introduce purity thresholds and McKinsey identifies the processing of lower-grade streams as the next innovation frontier, then the quality of collection and sorting translates directly into money. Mixed, contaminated metal fractions are becoming harder to export, while cleanly sorted material is gaining value.
The second is capacity. EU export restrictions keep scrap in Europe, but this only strengthens supply security if there is enough domestic remelting and processing capacity alongside it – otherwise the price of retained material falls and the economics of collection deteriorate. The same applies to battery waste: those who only pre-treat export the raw material and leave the added value to others.
The third is efficiency. The tools discussed for mining – data-driven operations, automation and artificial intelligence – promise the same result in waste sorting: more recovered material from the same investment.
It is also worth keeping the report’s limitations in mind. This is a consultancy analysis whose figures rely mainly on the base case of McKinsey’s MineSpans model; it focuses primarily on metals and mining and touches only briefly on plastics, paper and building materials. The direction, however, is clear: in the coming years, access to metals will be decided not only at the mines, but also at collection yards, sorting plants and in waste shipment permits.
Frequently asked questions about the global materials industry outlook
Why was 2025 a record year for the global materials industry?
Mainly because of rising gold and copper prices. Gold rose by 45 percent and copper by 9 percent, shifting the revenue mix towards higher-margin metals. As a result, the average EBITDA margin of metals and mining reached 27 percent and market capitalisation hit $3.7 trillion, while volumes and productivity remained essentially flat.
Why has scrap become a strategic raw material?
Because it is cheaper and lower-carbon than primary metal and reduces import dependence. The EU, the United States, Japan and Russia therefore restrict scrap exports, while China, Türkiye and India use purity thresholds to limit imports to higher grades. According to McKinsey, every metal with a mature recycling market now faces some form of restriction.
Which raw materials are expected to be in deficit by 2035?
In McKinsey’s base case, copper faces a gap of about 10 percent, rare earths more than 20 percent and nickel 10 to 20 percent, with deficits also expected for silver and manganese. The gaps have narrowed since last year’s outlook, but closing them would still require around $4.2 trillion of investment over the next decade.
How large is the productivity reserve in metals and mining?
Between $450 and $750 billion a year, equivalent to 15 to 25 percent of industry revenue. Of this, $300–475 billion could come from operational excellence such as autonomous haulage, $75–150 billion from procurement and $75–125 billion from better capital planning. Not all of it would reach profits, as widespread adoption would also affect prices.
How much could metals and mining emissions fall by 2035?
By only around 8 percent, from about 7,110 to roughly 6,580 million tonnes of CO₂ equivalent per year. Most of the decline comes from grid decarbonisation and efficiency gains, while higher recycled content contributes a smaller share. In Europe, around 20 million tonnes per year of planned green steel capacity has stalled.
How are data centres affecting demand for metals?
Significantly for certain metals. Data centre capacity could grow from 84 gigawatts in 2025 to nearly 600 gigawatts by 2040. By 2030, data centres could account for around 6.2 percent of gallium demand, 4.3 percent of copper demand and about 2.5 percent of germanium and rare earth demand, despite representing less than half a percent of industry revenue.
🔗 Official sources and references: 👉
McKinsey & Company: Global Materials Perspective 2026 (13 October 2026; authors: Karel Eloot, Michel Foucart, Michel Van Hoey and colleagues, McKinsey Global Energy & Materials Practice) and the full 70-page PDF report. This article is an independent summary and professional assessment based on the report’s data, not a reproduction of the report.
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