(Australian Associated Press)
Ratings agency Standard & Poors has raised its price forecasts for several of Australia’s key export commodities.
Prices for iron ore, Australia’s top export, are now expected to average $US55 a tonne in 2017, up from the agency’s previous estimate of $45 a tonne. They are expected to ease to $US50 per tonne in 2018.
The modest increase reflects the impact of stimulus measures in China in 2016, and the likely continuation of positive momentum in steel demand in the first half of 2017, S&P said.
Iron ore prices slumped to a decade low at the start of 2016, but have rebounded sharply in recent months to over $US80 a tonne.
The price of gold, another major Australian export, is expected to remain volatile in 2017, the ratings agency said, with its 2017 average at $US1,250 a tonne, from $US1,200 previously.
S&P expects copper prices to improve to $US5,070 a tonne in 2017, and $US5,290 the following year, compared to the previous estimate of $US4,00 a tonne and $US4,850 a tonne respectively. The gains are expected as rising demand opens up a gap on supply over the next two years.
S&P said the improved price assumptions could ease the negative rating pressure on certain miners, but said it doesn’t expect significant rating changes to follow.
It said ratings of miners affected by the changes will be reviewed over the coming weeks, in conjunction with financial results to be released in February.