In the current context of geopolitical tensions, natural disasters and epidemics like the novel coronavirus, the Fitch Ratings report says that mining companies that have a competitive cost structure and ample leverage need to be able to withstand commodity price risk.
On the other hand, companies with less efficient credit profiles and limited financial flexibility are expected to be at risk given the potential for such exogenous events to disrupt supply /demand conditions.
“Prices for copper, aluminum, iron ore and zinc have dropped significantly since the COVID-19 outbreak due to possible impact on Chinese demand,” a market analyst said. “In some cases, prices fell below Fitch's 2020 rating forecast of $ 5,900 per tonne of copper, $ 1,750 per tonne of aluminum, $ 75 per tonne of iron ore and $ 2,300 per tonne of zinc.
Fitch expects the coronavirus outbreak to weaken China's GDP growth this year, but the magnitude of the impact remains uncertain.
The ability of miners to stay afloat in the current environment
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Azovpromstal® 17 February 2020 г. 10:09 |
