Industry News

LatAm miners on track for stronger second half of 2020

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Update time : 2020-10-09 16:15:50

Latin America's metals and mining companies, by and large, are expected to have a stronger second half results in pandemic-riven 2020, with demand from Chinese steel makers and rising commodity prices underpinning their results, Fitch Ratings said in a new report.

"Leverage and liquidity are manageable for most issuers," Fitch said in its report.

The revenues for the region's metals and mining companies will continue to be "highly linked" to economic growth in China, the report said, while also adding that the recovery of Brazil's economy will play a key role in the performance of steel producers.

Fitch said it recently increased the economic growth forecast for China to 2.7% from 1.2% for this year while it revised the economic contraction forecast for Brazil to 5.8% from 7.0%. 

"Latin America metals and mining results exceeded expectations for 2Q20. Strong Chinese commodity demand has bolstered prices and will result in a strong 2H20," Joe Bormann, an analyst at Fitch said in the report.

The upward revision of gold and zinc prices will help Peruvian miners in the second half of the year, after they went through a 10-week shutdown from March to May. "Brazilian steel producers will also benefit from tight supply of steel in the market that has allowed them to raise prices," the report said, adding that copper and iron ore producers will also have a better than expected second half of the year.


 
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