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Fitch Ratings Updates Metals and Mining Price Assumptions

Metal News - Published on Mon, 31 Aug 2020

Image Source: Metal Price Forecast
Fitch Ratings has revised its main metals and mining price assumptions on evolving supply and demand trends. Fitch said We have raised nickel price assumptions for 2020 due to stronger-than-expected year-to-date price performance. The unchanged medium- and long-term prices reflect a potential tightness in supply as Indonesian ore exports remain banned by the government and may not be fully replaced by other nickel suppliers. We expect strong long-term demand, particularly from batteries for electric vehicles.”

It said “We have increased copper price assumptions for 2020-2021 due to a smaller-than-expected decline in global demand driven by a quicker recovery in China, thanks to an economic stimulus package and demand from construction. Demand will benefit in the long term due to electrification trends and growth in renewables, but we have revised the long-term price assumption downwards as we no longer forecast increasing deficits, but assume a more balanced market in the medium-term.”

Fitch said “We have modestly raised our zinc price assumptions to reflect a stronger-than-expected demand rebound in China and reduced mine supply. The slight price drop in 2022 reflects our expectation that the concentrate market will move to a surplus from roughly balanced in 2021. We expect the market will be broadly balanced thereafter and prices to trend to our mid-cycle assumption of USD 2,100/tonne.””

It said “We have raised aluminium price assumptions for 2020 and 2021 on a stronger market recovery in China. Destocking in 2Q20 was mostly driven by a pick-up in overall construction activity in the country, aided by supply reduction as smelters suspended their production. Demand remains weak in the rest of the world.”

Metals & Mining Price Assumptions
(USD per tonne)20202020202120212022202220232023Long-termLong-term
Commodity OldNewOldNewOldNewOldNewOldNew
Nickel (LME spot)1150013001325013250140001400014000140001400014000
Copper (LME spot)5300585058006000620062006400640070006700
Zinc (LME spot)1900210020002100200020002000210020002100
Aluminium (LME spot)1560165016001650180018001900190019001900
Gold (USD/oz)1400170013001400120012001200120012001200
Hard coking coal (Australia premium spot. FOB)140120140130140135140140140140
Thermal coal (Australia Newcastle 6.000 kcal/kg. FOB)63587268726770667066
Thermal coal (Qinhuangdao 5.500kcal/kg. FOB)74777979787876767676
Iron ore (China import iron ore fines 62%. CFR)75956075607060605560

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Posted By : Yogender Pancholi on Mon, 31 Aug 2020
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