In a new report, EY analyst Anjani Agrawal discusses the struggling global steel industry.

The Market Vectors Steel ETF SLX 2.02% has fallen 45.1 percent in the past year, and steel stocks Unites States Steel Corporation X 3.9%, AK Steel Holding Corporation AKS 3.04% and Cliffs Natural Resources Inc CLF 6.6% are all down between 40 and 85 percent during the current commodities slump.

With the industry searching for solutions during the persistent weak pricing environment, Agrawal lists four transformations that steel producers must make to survive in the long term.

1. Rationalize Excess Capacity

According to Agrawal, steel-producing countries are no longer isolated domestic markets, and excess capacity in one country now displaces production or sales in other countries.

Governments need to get away from using stop-gap solutions such as subsidies or temporary trade barriers and focus on encouraging steel companies to become globally competitive.

2. Increase Market And Product Concentration

Agrawal points out…

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