KPMG’s global Commodity Insights Bulletins provide insights into major trends, issues, regulatory changes and key developments within key mining commodities – Copper, Diamond, Gold, Iron Ore, Metallurgical Coal, Nickel, Platinum, Thermal Coal, and Uranium.
Like many in the industry, I am bullish on the long-term prospects of coal in general. Shorter-term, we are seeing improvements in pricing – albeit not at the levels we’d experienced just a few years ago.
There is a saying that good things come to those that wait.
The long-term fundamentals of the uranium industry remain
strong on the demand side but the medium-term outlook
remains in neutral, waiting for a kick start.
This year has seen miners intensify their efforts to ramp up production while adopting aggressive cost minimization and efficiency initiatives. This has been and remains critical as they seek to manage the impacts of falling copper prices.
The confirmation of the ban of Indonesian ore exports in early January 2014 has helped drive nickel prices higher.
The past 6 months have been extremely difficult for the platinum industry. In our last bulletin, we anticipated that the next 6 months would be bumpy
With declining thermal coal prices, shifting supply and demand dynamics in the US and Chinese policy sentiment towards the future is negative.
The spectre of synthetic diamonds also continues to rear its head as a potential threat to the industry.
The market for metallurgical coal remains difficult in the short term, with long-term optimism on the industry’s outlook.
For me, it’s not a question of if the spot and term prices will increase from their current lows but when.