20140121-高盛-Mining_commodities_outlook_for_2014_and_beyond_40页_1mb

Mining Commodities Outlook for 2014 and Beyond Summary

Core Content Overview

This document provides updated price forecasts and market outlooks for various mining commodities as of January 17, 2014. The analysis is based on supply and demand dynamics, geopolitical factors, and macroeconomic conditions, with a focus on base metals, bulk commodities, and PGMs (platinum group metals).

Main Viewpoints and Key Information

1. Price Forecast Updates

• Nickel: Upgraded 12-month forecast by 13%, with a potential price spike due to Indonesia's export ban and reduced supply. Near-term forecasts are:

  • 3-month: $14,500/t (from $13,500/t)
  • 6-month: $15,000/t (from $14,500/t)
  • 12-month: $16,000/t (from $15,000/t)
  • A significant probability of export restrictions not being eased, which could cause a spike to $18–20k/t.

• Zinc: Upgraded medium-term forecast by 3%, with a tightening supply expected by 2015 and a potential deficit in 2016.

• Palladium: Upgraded 12-month forecast by 14%, as the market is in deficit before investment demand.

• Iron Ore: Downgraded long-term forecast by 7%, with a 12-month decline of 21% expected due to structural surplus.

• Copper: Downgraded 12-month forecast by 15%, with a 12-month price forecast of $6,850/t in 2014 and $6,600/t in 2015. The long-term forecast is $7,660/t.

• Coking Coal: Downgraded long-term forecast by 7%, as inducement pricing is no longer considered the appropriate anchor.

• Potash: Upgraded short-term forecast by 13% due to earlier price bottoming, with 2014 and 2015 forecasts at $318/t and $310/t respectively.

• Aluminium: Retained cautious view, with 3-month forecast at $1,700/t (from $1,800/t), 6-month at $1,700/t (from $1,750/t), and 12-month at $1,750/t (from $1,700/t). Expected to turn around by mid-2015.

• PGMs: Platinum and palladium are expected to face downward pressure due to a weak South African rand and surplus market conditions.

2. Market Dynamics and Trends

• Nickel: Supply constraints are expected due to Indonesia's export ban, which may lead to a shortage of nickel ore in late 2014 and 2015. Surface stocks are expected to dry up in 2014.

• Copper: Despite strong global demand growth, the market is expected to remain in surplus due to high supply growth from a decade of capital investment. Recent supply disruptions have supported prices temporarily.

• Iron Ore: A structural surplus is expected in 2014, with up to 80Mt of seaborne production capacity becoming redundant. China's domestic production will decline by about 9% in raw ore terms.

• Thermal Coal: Prices are expected to remain range-bound, with a forecast of $85/t FOB Newcastle for 6,000kcal NAR coal.

• Metallurgical Coal: Continued supply cuts expected, with a 3% downgrade in 2014 forecast to $145/t and a 7% downgrade in long-term forecast to $185/t.

• Potash: Prices have bottomed earlier than expected, with a forecast of $318/t for 2014 and $310/t for 2015.

• Mineral Sands: Outlook remains challenging due to inefficient use and substitution by customers, with a 2% downgrade in zircon forecast to $1,125/t.

3. Key Risks

• Upside Risks:

  • Major smelter disruptions in 2015.
  • Mine supply disruption in Indonesia due to aggressive concentrate export tax in 2015/2016.

• Downside Risks:

  • Lower-than-expected global demand growth from 2014 to 2016.

4. Recommendations

• Nickel: Recommend trading from the long side for the next 12 months, with risks skewed to the upside. Producers should consider hedging long-term output in case of a major price spike, and consumers should hedge around these levels ahead of a potential end-of-year spike.

• Zinc and Lead: Remain bullish, with zinc expected to tighten supply by 2015 and move into deficit in 2016.

• Copper: Maintain bearish forecasts for the short to medium term, but moderate near-term bearishness due to supply disruptions and reduced inventory visibility.

• Aluminium: Cautious view due to strong Chinese supply growth, with potential for a turnaround by mid-2015.

5. Special Notes

• The report is a single factor in making investment decisions and should be used alongside other analyses.
• The authors are Goldman Sachs Research analysts, including Christian Lelong, Max Layton, Jeffrey Currie, Roger Yuan, and Amber Cai.
• Price data is as of January 17, 2014, unless otherwise noted.
• The analysis includes references to various data sources and charts, such as the LME, IRESS, Bloomberg, and CEIC.