Outlook for base metals industry remains negative – Moody’s
JOHANNESBURG (miningweekly.com) – Global base metals prices will not change materially over the next 12 to 18 months and could face further downside risk, as prices remain on a downward trend, says ratings agency Moody’s.
“Our outlook for the global base metals industry is negative, which means that fundamental business conditions will worsen,” it noted in its 2016 Global Base Metals Outlook report on Monday.
It added that slowing growth rates in China and Brazil, continued sluggishness in Europe, and a weak recovery in the US would contribute to a more muted demand picture and, importantly, less optimism about the pace of future growth.
Moody’s further pointed out that the weakening macroeconomic growth indicators and negative investor sentiment would continue to weigh on base metals industry fundamentals in 2016.
“Cost curves have moved lower, but the steeper price decline will hurt earnings performance for the industry. The ability to cut capital expenditure and further reduce controllable costs will mitigate, but not offset, the pain,” it stated.
However, the ratings agency highlighted that it could change its outlook for the industry to stable if purchasing managers' indexes (PMIs) in Europe, China and the US – the key consuming regions – tracked between 50 and 55 for at least two consecutive months, and if Moody's global macro outlook was for gross domestic product (GDP) growth of between 3% and 4%.
“A positive outlook would require PMIs in the US, Europe and China exceeding 55 for at least three consecutive months, and for Moody’s global macro outlook for GDP growth to be greater than 4%,” it added.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation