Moody's Investors Service has announced that it has changed its global metals and mining outlook to stable from negative as business conditions have modestly improved in the US and Europe, and China´s reopening of the economy supports demand for steel and coal, improving the business conditions for the global metals and mining industry.
Despite the change in the outlook, Moody’s has maintained its 12-month price assumptions for all commodities except coal.
Prices for iron ore will ease further through at least early-to-mid 2024 as global supply gains start to outpace demand. However, reduced production guidance from iron ore producers in Brazil and Australia will support prices for at least the first half of 2023. Meanwhile, steelmakers will generate historically strong earnings and cash flow in 2023, but steel demand will likely weaken through the year as higher interest rates mute growth in steel-consuming.
In addition, metallurgical coal prices will be supported in 2023 by the expansion in India’s steel production and improving economic conditions in China, offsetting some risk to demand elsewhere. Thermal coal prices will exceed historical averages through early 2024.