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Welcome to the Q2 2025 edition of the Global Mechanical and Subassemblies report.

The global economy continues to experience moderate growth amid an evolving trade and geopolitical environment. To navigate market volatility, supply chain efforts should prioritize flexibility & risk mitigation.

Tariff policies impact commodities, with levies on metals & resins driving upward pressure on costs. This increases manufacturing costs for commodities, including cables and packaging, and disrupts supply chains for finished goods like batteries and displays. This necessitates agile supply chain strategies to mitigate tariff-induced volatility.

Industrial sectors across "Mechanicals" commodities are experiencing growth driven by technological advancements and increasing demand.  Key trends covered in this report include:

Batteries: The battery market is driven by the electric vehicle (EV) sector, with a projected 20% CAGR in EV sales through 2030, supported by advancements in battery technology, consumer awareness of sustainability, and government policies. Grid-scale energy storage systems (ESS) for renewables are expected to exceed 1 TWh globally by 2030, while the consumer electronics sector sees sustained demand for lithium-polymer batteries in smartphones, laptops, and wearables.

Cables: The global power cable market is projected to reach USD 425.47 billion by 2032, driven by automation and digital technology integration across industries. Detailed processes for various types of cables, including harness, molded, RF-coaxial, LVDS, high-speed, FCC-ribbon, and power cords, highlight the sector's complexity and innovation.

Die Cut: The industry is characterized by positive development trends, with a projected GDP growth rate of 2.8%. Key sectors include high-end electronics, clean energy, and AI. Various die-cutting techniques meet diverse industry needs, such as rotary, flatbed, laser, ultrasonic, and punch-and-match metal die-cutting. Adhesive tape manufacturers focus on sustainable and high-performance products. The foam market is expanding rapidly, driven by wireless infrastructure and EVs, and protective film technology advances in the foldable phone market.

Displays: The display market is experiencing significant growth due to advancements in OLED, Micro LED, and e-paper technologies. There is a growing demand for high-resolution and flexible displays, particularly in consumer electronics and automotive sectors, with the market projected to reach USD 121 billion in 2025.

Metals: The demand for aluminum is growing, driven by EVs, renewable energy projects, and construction activities, with a stable supply but potential price increases due to a tight alumina supply. Copper demand remains strong in renewable energy and EVs, with a stable supply but potential price volatility due to geopolitical factors. Stain steel and EV batteries drive Nickel demand, with stable supply but potential price fluctuations due to oversupply and weak demand recovery. Steel demand is influenced by the construction and manufacturing sectors, with stable supply and potential price increases due to tariffs and changes in production capacity.

In the USA, the current administration's recent tariffs on metals, including a 25% tariff on steel and a 10% tariff on aluminum, are designed to protect domestic industries and boost production.  These tariffs are expected to have several key impacts:

• Aluminum: Domestic production is likely to increase as import costs rise, encouraging investment in local capacity. However, this may hinder exports from Canada, Mexico, and other trade partners, affecting their production plans. Market volatility is anticipated, especially with the additional tariffs on Chinese imports.
• Nickel: The tariffs on steel and aluminum could reduce demand for nickel, as these industries are major consumers. Higher production costs or restrictions may lead to decreased nickel demand.
• Steel: The proposed infrastructure investment plan could drive substantial steel demand. The tariffs aim to protect domestic manufacturing, potentially increasing U.S. steel production capacity while stabilizing prices. Canadian and Mexican steel production may remain stable or decline.  Domestic steel prices are likely to rise due to disruptions to the supply-demand balance.

Optical Lens: The optical lens market is growing, particularly in mobile and automotive camera segments. Innovations in high-resolution lenses drive demand, with stable supply and strong demand in the Asia-Pacific region.

Packaging: The packaging industry is experiencing growth, with plastic packaging (LDPE/HDPE) driven by e-commerce and technological innovations. PET packaging demand is stable, with potential price increases due to raw material costs and supply chain constraints. The paper packaging (linerboard) market shows mixed dynamics, with stable demand, price fluctuations, and significant capacity expansions in Asia.

Power Supplies: Power supplies are in high demand due to the expansion of data centers, AI technologies, and electric vehicles. The supply remains stable, with increased demand for high-power and high-performance power supplies.

Resins: The markets for ABS, POM, PC, PBT, PA, and PP are characterized by stable supply and potential price fluctuations due to demand and geopolitical factors, focusing on sustainability and technological advancements.

The Jabil Commodity Management team monitors these markets and supports our partnership network to ensure supply continuity and cost efficiency.  If you have questions about the report or want further information, please get in touch.

Yours sincerely,

	Keith Lapinski - VP, Supply Chain
	Andy VanPutte - Senior Director, Supply Chain

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