Fitch Ratings raises its metals and mining price assumptions
YEREVAN, March 22, /ARKA/. Fitch Ratings has raised its metals and mining price assumptions, reflecting increased post-pandemic demand, tight markets and short-term supply disruptions, particularly due to the Russia-Ukraine conflict, Interfax news agency reports.
According to the ratings agency, some commodities also benefit from increased longer-term demand due to their role in global decarbonization.
The increase in nickel price assumptions for 2022-2024 reflects increased supply risks (Russia accounts for about 7% of total nickel production and 15% of class 1 nickel), while demand from battery production remains strong..
Copper is the only commodity where the ratings agency increased its long-tern assumptions due to its use in electrification. The revised short-term prices reflect very low global stocks, a balanced market and current and potential supply disruptions.
Proposed new laws in Chile and Peru to introduce higher industry taxes could slow investments in copper mining, limiting supply in the medium and long term. Russia accounts for 4% of both mined and refined copper, so the Ukraine conflict and related sanctions may affect availability.
Fitch Ratings says its increased gold price assumptions for 2022-2023 reflect increased demand thanks to gold’s ‘safe haven’ investment status amid the Russia-Ukraine conflict and rising inflationary pressures. Long-term price moderation is unchanged as the interest-rate hiking cycle continues, ultimately increasing the opportunity cost of holding gold and putting pressure on its price. -0-
