The outlook for the global metals and mining industry has been changed from positive to stable, Moody’s Investors Service says in a report published last week. The industry´s EBITDA is expected to grow by about 8% over the next 12 to 18 months as the world economy recovers from the pandemic-induced slowdown and demand for steel, iron ore and coal.
Moody’s said that the imbalance between global steel supply and demand will stabilize in 2022, and the steel prices will fall back from the high level of this year to the historically normal level.
Moody’s said that as the global vaccination rate rises, the epidemic is expected to relieve, and the governments will take off the stimulus policies. Eventually, the market will return to normal, and the overall steel demand may decrease.
Furthermore, Moody’s said that the iron ore price of 2022 would be closer to that in 2016-2019, at US$70-80/MT. The overall steel price would remain high level due to tight supply at present, but the price will reversal according to the gradual balance of supply and demand.
In addition, Moody’s said that the coking coal price will also return to normal because the trade war between China and Australia is expected to ease.