Fitch Revises Short and Medium-Term Metal and Mining Price Forecasts

Fitch Ratings has raised its assessments for copper, lithium, and gold for 2024-2025 due to higher prices since the beginning of the year, supply constraints for lithium in 2025, tight market balance for copper, and a geopolitical premium for gold. It also increased its 2024 assumptions for iron ore, aluminum, rhodium, and thermal coal, but lowered its price forecasts for cobalt for 2025-2027 due to increased supply. Fitch raised its zinc price forecasts for 2024-2026 due to concentrate shortages.

In its note, the rating agency did not change its forecasts for coking coal, platinum, palladium, and nickel. Fitch noted that the trade and energy transition policies of the Trump administration and their broader impacts on various sectors, China, and the global economy will affect copper demand in 2025-2026. According to Fitch, while the energy transition will continue to support China’s copper demand, increasing protectionism and slowing economic growth pose significant downside risks.

Fitch attributed the increase in the 2024 iron ore assumption to high year-end prices, while the higher 2024 aluminum assumption reflects this year’s strong prices supported by the delayed restart of smelting facilities that were halted due to elevated alumina prices. The increases in the zinc assumptions for 2024-2026 reflect concentrate shortages, although demand growth is likely to remain stable. The rise in the gold assumptions for 2024 and 2025 is attributed to the increasing geopolitical premium due to the metal's safe-haven status.

According to Fitch, global thermal coal consumption is expected to decline in 2025 due to weak demand from the energy sector, although this decline will be partially offset by higher industrial usage. Fitch stated that the increase in the 2024 lithium price assumption is due to higher year-end prices, while the higher 2025 assumption reflects supply constraints resulting from production cuts announced in 2024.