Categories: Base Metals / Energy / General Market Commentary
Topics: General Base Metals / General Energy / General Market Commentary

Copper price: Warnings over US trade with China, Mexico

Copper price: Warnings over US trade with China, Mexico

Credit ratings agency Moody's warned at the beginning of the year that the downturn in raw materials was like no other and that the global mining sector was undergoing structural change.

As a result, Moody's embarked on a sector-wide review of the 87 global mining majors that it covers and in the process dropped big names like Freeport-McMoRan, Anglo American and Vale into junk territory and axed ratings for heavyweights like Rio Tinto, BHP Billiton and Chile's state-owned Codelco.

"We expect base-metal prices to be under pressure in 2017, though we do not expect prices to retreat to the lows seen in late 2015 and early 2016"
In August Moody's issued a new report on the global base metal sector, changing its outlook from negative to stable as the rally in many metals showed some resilience and rewarding companies like Rio Tinto, Teck Resources and Anglo with better outlooks following successful debt reduction strategies.

However, Moody's believes the latest leg up for base metals (bellwether copper is up more than 25% over the last eight weeks) is not sustainable. Carol Cowan, Moody’s Senior Vice President says most metals markets remain in surplus and "supply-demand fundamentals have not improved meaningfully":

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