According to PwC analysis, the total value of deals fell by 32% to $US11.4 billion – the lowest level since analysis began and $3.7 billion below the post-credit crunch low in 2009 and $4.7 billion below the first-ever report in 2003.

Deal value was in line with previous years, with the focus shifting to smaller transactions.

PwC global metals leader Jim Forbes said most of the few larger deals had been focused on specialty and engineered metals, such as Alcoa’s planned demerger and Berkshire Hathaway’s $32.1 billion acquisition of Precision Castparts.

“Looking ahead, the environment remains challenging with downside risks increasing and global growth forecasts being adjusted downward,” he said.

 “Another big factor hitting the sector has been the downward slide in commodities prices: iron ore prices have dropped, reflecting oversupply and a lack of confidence that capacity will be taken out of the market, with prices for copper and zinc also falling.

“And, although in much less of a decline, aluminium prices have also dropped during 2015 reflecting concerns about an oversupplied market.
“What this analysis tells us is that, for the time being at least, metal M&A is likely to remain in the doldrums.”

PwC’s modelling suggests a compound annual growth rate of 3.9% this year in announced deal numbers, with deal value to grow by 8.7%.

Distressed sales could increase this figure, with Anglo American last week announcing the planned divestment of up to half of its asset base.

The company is believed to be close to a sale of its niobium and phosphates business, while the Australian coal assets are expected to be in-demand.