Base metals performance to slow in short term, Moody’s predicts

Moody’s forecast for the global base metals industry is stable, while it predicts performance to weaken over the next year and a half, Mining Weekly reported Monday.

According to the report, Moody’s Investor Service says performance will weaken due to continued trade tensions between the US and China, NAFTA uncertainty between the US, Mexico and Canada and general global economic slowdown.

Over the next year, Moody’s predicts prices will remain below 2018 levels while rising costs will put price margins under pressure.

Lead considerations for the industry’s future performance are replenishing resources and keeping capital spending down.

“Exploration and development expenditures have increased following several years of decline, as companies focus on restoring their finances,” the financial services company states.

“Given the depleting nature of the industry and years necessary for a new greenfield mine to reach production, the development of new mine supply for copper, nickel and zinc remains necessary. The announced rollout of battery electric vehicles creates significant new demand over time,” Moody’s adds.

(With files from Mining Weekly)