Thanks to China’s robust economic recovery, the outlook for the global mining sector is stable for 2021, according to Fitch Ratings.
In a new report, the rating agency said the metals and mining sector is enjoying improved demand and higher prices on the strength of significant infrastructure investment in China, and government policies to support construction.
This underpins Fitch’s outlook for the sector next year.
“Our stable sector outlook reflects favourable conditions in several important markets, such as iron ore, copper and aluminium,” it said.
Both iron and gold miners “will continue to benefit from robust demand and cash flow generation in 2021,” Fitch said.
“Demand for nickel, which is used in batteries, could be boosted by the European green recovery pledges that introduce tax breaks and purchase incentives for electric vehicles,” it said.
Notwithstanding the underlying demand dynamics, Fitch said metals prices are expected to moderate overall in 2021.
“Supply-demand dynamics for individual commodities will evolve, reflecting economic growth in various regions,” it said.
“Risks of pandemic-related supply disruptions and slower-than-forecast economic growth will linger next year, but their impact on the sector will be moderate compared with the downturn in [the first half of 2020],” it concluded.