Fitch Ratings said it raised 2024-2025 price assumptions for copper, lithium and gold, while cutting its 2025-2027 assumptions for cobalt.
The increased 2024 copper assumption reflects higher prices this year, Fitch said, adding the revised 2025 assumption reflects likely higher prices early in the year and the tightly balanced copper market.
"The Trump administration's trade and energy transition policies, and their wider implications for various sectors, the Chinese and global economies, will affect copper demand in 2025-2026," according to Fitch.
Lithium
Increased 2024 lithium price assumptions are driven by higher year-to-date prices, while the higher 2025 assumption reflects supply constraints due to mine production curtailments announced this year, Fitch said. About 75% of lithium production is for use in electric vehicles, and changes in subsidies, consumer preferences and automakers' decisions will continue to affect demand for the vehicles.
Gold
Fitch said its increased gold assumptions for 2024 and 2025 are driven by the higher geopolitical premium due to the metal's safe-haven status.
Iron Ore
Fitch has increased its 2024 iron ore assumption, driven by higher year-to-date pricing. "However, the unchanged assumptions for other years continue to reflect a shift to market oversupply," the agency said.
Aluminum
A higher 2024 aluminium assumption reflects stronger prices this year with support from delayed restarts of smelters curtailed due to high alumina prices. The agency added there are early signs of recovering demand in developed markets.
Zinc
Increased 2024-2026 assumptions for zinc reflect concentrate shortfalls with demand growth likely to remain steady according to Fitch.
Rhodium
A higher 2024 assumption for rhodium is supported by stronger year-to-date prices driven by demand from automotive and chemical industries where it is used for catalytic converter processes.
Thermal Coal
Increased 2024 assumptions for both thermal coal benchmarks reflect stronger year-to-date prices. "We believe that global consumption of thermal coal is likely to begin a decline in 2025 due to weaker demand from the power sector only partially offset by higher industrial use," Fitch added.
Cobalt
Reduced 2025-2027 cobalt assumptions reflect increasing supply mostly due to growing Chinese refining capacity that increases exports to Europe. The agency also noted weak prices are likely leading to curtailments and deferral of refining capacity by smaller non-integrated refiners particularly those outside China with prices eventually steadying in line with mid-cycle assumptions. Slower demand growth for cobalt from battery EVs is partly offset by demand from plug-in hybrids while demand from portable electronics has been recovering according to Fitch.
This article was written by Stephen Nakrosis at stephen.nakrosis@wsj.com