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Monday, 14 September 15
MOODY'S LOWERS COMMODITY PRICE ASSUMPTIONS ON MACRO, INDUSTRY FACTORS
Moody's LogoCOALspot.com: Moody's Investors Service has lowered its base metal price assumptions for 2015-17 as slowing growth in China, lower oil prices, overcapacity in the global steel markets and the strong dollar are driving commodities prices close to the lows of the 2008-09 financial crisis.

"Slowing growth in China, one of the largest global consumers of base metals, is a key driver in the lowering of our commodities price assumptions," says Carol Cowan, a Moody's Senior Vice President. "But the weak economy in Europe, negative GDP growth in major economies such as Brazil and slowing US growth were also contributing factors."

Moody's notes that the stronger US dollar will increase the cost of metal purchases, which could cause demand, and subsequently prices, to decline, according to the report "Moody's Lowers Commodity Price Assumptions."

While the rating agency has lowered its base price assumptions for gold, high-quality metallurgical coal, Newcastle thermal coal, aluminum, copper, nickel and zinc, the supply/demand dynamics for each metal differ.

Moody's expects that global macro and industry-specific conditions will remain challenging in 2016, but that production cutbacks and a better balance between supply and demand will lead to modest improvement in 2017.
Source: Moody’s


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