Base Metals Prices Expected to Improve in the Medium Term, Says Thomson Reuters GFMS

Mining Weekly reported that Thomson Reuters GFMS expects base metals to see considerable price gains in the medium term, but said prices will remain “largely muted” in 2016.
As quoted in the market news:

Base metals prices were between 12% and 34% lower than at the start of this year, the latest Thomson Reuters GFMS Base Metals Review and Outlook report shows.
The report authors noted that the top ten base metals miners had a combined market value of just over $280-billion – about half of what it was 12 months earlier and almost a quarter of the peak of the super-cycle in early 2011.
“Overall, the landscape for the mining sector looks rugged. The clock has turned back commodity prices and revenue to levels last seen in 2008/9, while, over the same period, debt on the combined balance sheets of the ten miners is more than 50% higher,” the report pointed out.
Thomson Reuters GFMS said free cash flow was holding up, but only as a result of “drastic” cuts to capital expenditure (capex), which would partly impact mining flexibility and future growth plans. Further downside to commodity prices would, therefore, be much tougher to absorb.

Click here to read the full Mining Weekly report.