Miners Are Winners as Consumers Buy Metals at Any Price

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Miners have emerged as the key winners from higher commodities prices, Standard and Poor's analysts asserted in an article published this week by the credit rating agency. London-based S&P Secondary Credit Analyst Alex Herbert noted that consumers of mined products seem ready to buy at almost any price.

Miners have emerged as the key winners from higher commodities prices, Standard and Poor's analysts asserted in an article published this week by the credit rating agency. London-based S&P Secondary Credit Analyst Alex Herbert noted that consumers of mined products seem ready to buy at almost any price.

For instance, Herbert cited the security of supply in concentrated iron ore as the biggest factor for consumers with iron ore prices coming in second. "Those high prices are offset by higher input costs of energy, labor, and raw materials-but not to a significant degree. Less well placed, however, are the steel producers who are more exposed to higher costs, especially for iron ore, but are still able to pass such costs on to customers."

Primary Credit Analyst Thomas Watters of New York City suggested that the supply side will drive the price of mined metals over the next several years. "Big exploration strikes are not occurring and production costs have increased meaningfully which, over the longer term, tend to eliminate marginal or swing production supporting a price floor for commodities. The average base line price for most of these commodities will remain elevated when compared to prior periods."

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