OREANDA-NEWS. April 09, 2012. According to a new edition of PwC’s  annual in-depth metals M&A review and forecast, Forging Ahead, the global metals deals industry is soaring back to success with near historic value highs of USD 40.7bn in 2011, up 56% year on year (YOY), reported the press-centre of PwC.    

Experts say the industry is rebounding strongly from its post credit-crunch low and is now averaging more than 500 metals deals a year.  In 2011 there were 533 total deals with an aggregated value of USD 40.7bn, compared to 2010’s 547 deals amassing USD 26.1bn.

There were 176 deals completed in Europe (including Russia). Deal value shot up 518% for western Europe and 125% for central and eastern Europe YOY, reaching USD 11.4bn, the lion’s share of which came from four key deals. EU steel production as a whole rose 2.8% YOY compared to 6.8% globally.

While dealmaking for targets in central and eastern Europe and Russia was quiet, western Europe proved a busy deal arena in 2011. The number of deals was up by a fifth (20%) and total completed deal value shot up from a very low base to top the US\\$10bn mark by the year end. US\\$7.6bn of the US\\$10.5bn total western European deal value came from the four largest deals.

European metals companies continue to face higher raw materials and energy costs which they have struggled to pass on in the absence of a clear recovery in all their end markets. EU steel production as a whole increased 2.8% year on year in 2011 compared with a 6.8% increase in world steel production. Among the larger producing countries, production in Russia rose by 2.7%, German output rose by 1% but there were declines of 4.6% and 2.4% in Spain and the UK respectively.

In North America, deals rose by almost a third and value quadrupled, giving it the largest share of worldwide metals deals value. There were 118 deals in 2011 at a value of USD 12.2bn compared to 90 deals in 2010, valued at USD 3.1bn.

Deals for Central and South America accounted for almost a quarter (24%), of total metals deals value in 2011. Brazil delivered the vast majority of 2011 deals in the region accounting for a total of USD 9.8bn worth of deals.

In Asia, steel production rose by 7.9% in 2011, but crude steel down by 1.8%. There were 206 deals in total valued at USD 7.3bn compared to 239 deals in 2010 valued at USD 11.5bn.

China, by its sheer size and stature in the metals market will also undoubtedly remain one of the key global drivers in the metals deals sector as more than half of global iron ore trade is bought by the nation. China’s steel sector is primed to undergo a long awaited consolidation with India also expected to follow suit after a landmark deal last year.