VANCOUVER (miningweekly.com) – Improved fundamentals amid global economic growth are expected to sustain a higher pricing environment for the global base metals industry, prompting credit ratings firm Moody’s Investors Service to adjust higher the price sensitivity ranges for copper, iron-ore, and metallurgical and thermal coal, the advisory firm stated on Wednesday.
“While we still expect volatility and some moderation towards the end of the year, each metal has its own drivers. For copper, it’s supply disruptions and a lower surplus than expected; for aluminium, inventory drawdowns and curtailments – executed and planned in China; for zinc, a deficit position; and for nickel, inventory drawdowns and better supply demand balance developments,” said senior VP Carol Cowan in a news release.
Moody’s price sensitivity ranges represent baseline estimates that it uses to evaluate risk when analysing the credit conditions of companies within the sector.
The firm views the higher price levels over that of 2016 as sustainable.
Moody’s has raised its price outlook for copper to a range of $2.25/lb to $2.75/lb over the 2017/18 horizon, up from $2.15/lb to $2.40/lb forecast previously.
The price assumption for 62% content iron-ore, delivered to China, has been increased to a range of $45/t to $75/t, up from $45/t to $65/t estimated earlier.
Further, steelmaking metallurgical coal is expected to trade in a range of $95/t to $145/t, up from a range of $105/t to $135/t previously and Newcastle thermal coal prices are now expected to range between $55/t and $80/t, up from prior estimates of $60/t to $75/t.
The gold price outlook remained unchanged at a midpoint of $1 200/oz, with silver also stable at a midpoint of $17/oz.
Aluminium is expected to range between $0.75/lb to $0.85/lb, and the nickel price outlook is pegged at between $3.75/lb and $5.25/lb. The zinc price sensitivity analysis also remained stable at a range of $0.90/lb to $1.20/lb.