‘Metal prices expected to average higher in 2021’

Financial risk management, solutions and insights company Fitch Solutions Country Risk and Industry Research (Fitch Solutions) expects miners and metal producers to experience a more favourable pricing environment in 2021 with nearly all mineral and metal prices forecast to average higher on a year-on-year

average basis in 2021.

The stark exception will be iron-ore prices, which Fitch Solutions expects to head lower in 2021, yet remain elevated after being the “clear outperformer” this year among the entire commodities complex, owing to the substantial increase in demand driven by China’s infrastructure stimulus and constraints on supply growth.In 2021, Fitch Solutions posits, prices will be supported by the broader and deeper global economic recovery as Covid-19 vaccines are made available. The weaker dollar forecast by the Fitch Solutions team in the medium term will also act as a tailwind for commodity prices.

Further, access to a vaccine will also help reduce disruptions to operations in 2021.Fitch Solutions points out that widespread lockdowns and restrictions negatively impacted on many operations this year. This was particularly the case in the copper market. In terms of demand, Fitch Solutions forecasts a sharp recovery in global mineral and metal demand in 2021.“China’s metal consumption will remain strong as infrastructure projects continue to make progress supported by government policy. However, it will be difficult to find further upside catalysts for steel demand in the country given the strength of consumption showcased in 2020 with government stimulus.”