Former Rio Tinto CEO Tom Albanese believes the commodity downturn has reached the bottom of the trough, and is on its way up once more.
Over the year to date iron ore has moved from strength to strength, with its rally only now begin to falter, whilst gold and silver have outperformed market expectations, reaching their highest point since January 2015, a massive shift away from the spiralling markets seen at the end of last year.
“I believe with what we’ve witnessed early in 2016 will be the trough for the commodity markets,” Albanese said in a recent earnings conference call, according to Bloomberg.
“Commodity prices have improved materially in the last couple of months, and investor sentiment has started to turn cautiously positive on the resources sector.”
Capital Economics analyst Simona Gambarini added that “all the precious metals are up quite strongly on the back of weakness in the dollar, after poor GDP data in the United States and a lack of action by the Bank of Japan”.
In the Resources and Energy Quarterly, by the Department of Industry, Innovation and Science and the Office of the Chief Economist, the report posits an optimistic future and resurgence for the mining industry, albeit nowhere as strong as the previous boom.
“Over the medium term, the outlook for Australia’s exports is moderate,” the report stated.
“Although the prices for Australia’s largest commodity exports – iron ore and coal – are projected to increase, they are expected to remain well below the prices recorded over the past few years.”