Dollar’s bull-run end won’t benefit all emerging economy miners – BMI
JOHANNESBURG (miningweekly.com) – While the imminent, usually positive, end of the bull run for the dollar strength will stabilise mineral prices, not all emerging markets will benefit, Business Monitor International (BMI) Research said on Monday.
In a statement, the group explained that currency strength in some emerging markets, in conjunction with dollar weakness, would drag on domestic miners' earnings, while depreciation in others would further strengthen margins.
“We believe the strength of the US dollar relative to emerging market currencies has topped out and [we] are forecasting a gradual decline in trade-weighted terms over the coming years,” it said.
The strong dollar had, over the past five years, offset some of the negative impacts of low mineral prices on miners’ earnings, as input costs were denominated in domestic currencies and sales in US dollars.
Now, the dollar was expected to depreciate by an average of 1% a year over the next five years; however, some emerging markets’ currency strength, most notably the South African rand, Chilean peso and Russian rouble, would be a drag on earnings over the coming years.
The rand, peso and rouble were expected to appreciate 3%, 1.3% and 0.6% on average a year between 2017 and 2020, offsetting some of the gains resulting from mineral prices stabilising.
Even though the worst might be over for commodity prices – barring iron-ore, which would remain low owing to an oversupplied seaborne market – BMI expected the 2016 recovery to only be followed by a gradual multiyear uptrend, as opposed to a significant surge.
Further, the 2020 average forecast for the majority of industrial commodities, including copper and coal, were below the 2014 average prices.
Article Enquiry
Email Article
Save Article
Feedback
To advertise email advertising@creamermedia.co.za or click here
Research Reports
Projects
Latest Multimedia
Showroom
Axiom Hydraulics is a trusted leader in South Africa’s hydraulic industry, delivering world-class components, systems, and engineering expertise...
VISIT SHOWROOM
Your global lifecycle technology & service partner for materials & minerals processing equipment for coal, iron ore, copper, manganese & other...
VISIT SHOWROOM
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
