Currency movements will remain an important factor determining mining company profits in the coming years as our currency forecasts vary significantly among countries. Based on our forecasts, margins on projects in Latin America will be pressurised most from appreciating local currencies while those in Australia will gain as the coming years will see the currency depreciate.
Equities of major iron ore miners will outperform iron ore prices, which will remain on an average yearly downtrend over our forecast period to 2021. In spite of low prices, iron ore majors will be bolstered by their low cash costs and increasing operational efficiencies, which will lead to sustained output from their mines adding to the global supply glut over the coming years.
While mining company earnings will benefit from gradually higher mineral prices in the coming years, the broad-based surge in mining equities over the past 12 months has already priced in most of the good news for the sector, in our view.
A member of our Client Services team will be in touch soon to arrange a convenient time for a free demonstration of the service. If your enquiry is urgent, please email our team here.
Thanks, BMI Research