Large reels of thick copper wire stock photo

As economic outlooks dim, expectations for most metals prices are falling too, and Fitch Ratings is lowering its price assumptions for an array of mining products.

In a new report, the rating agency cut its short-term price assumptions for copper, aluminium, nickel, zinc and iron, citing the prospect of deteriorating demand as economic growth slows, and the fact that prices have already pulled back.

At the same time, the effects of Europe’s energy crisis prompted Fitch to raise its price expectations for thermal coal, pointing to increased demand in Europe for coal-powered energy, as gas supplies dwindle, and strong demand in China.

While the rating agency sees lower prices for many metals, its price assumptions for gold remain unchanged, “reflecting the metal’s ‘safe haven’ investment status amid high geopolitical instability and inflationary pressures.”

In the longer term, Fitch said it expects gold prices to moderate “once geopolitical risks abate and as the interest-rate hiking cycle continues.”

Similarly, short-term issues aside, the rating agency’s medium- and long-term price assumptions for many of the base metals remain unchanged.

For example, the report said increased demand for electric vehicles over the longer term should support nickel prices.

Similarly, copper’s prospects “remain solid” in the medium term, it said, “due to the energy transition accounting for 50% of growth in global copper demand anticipated over the next five years.”