Commodities prices forecast to remain high during 2021

Amid doubts about a possible supercycle, Brazilian mining association Ibram estimates prices of the main commodities produced and exported by the country will likely remain high this year. 

"I would not say that there is a supercycle of commodities, but undoubtedly as long as we have 2021 showing an economic recovery, mainly from China, prices will keep trending upward," Ibram chairman Wilson Brumer said during an online press conference in response to a question from BNamericas.

According to Brumer, citing mainly iron ore, copper and nickel, prices are expected to stabilize in 2022.

The Brazilian mining industry enjoyed a positive first quarter, thanks to strong demand from China. 

Mining revenues reached 70bn reais (US$12.8bn), up 95% from 36bn reais in the first quarter of 2020, according to Ibram. 

"In the first quarter of last year the Chinese economy was still feeling the impact of the pandemic. At the beginning of this year we saw the reversal of that, with robust growth of the Chinese economy, generating more demand for commodities," Brumer said.

The rise in prices of Brazil’s main commodities such as iron ore, nickel, copper and gold, combined with the depreciation of the real currency versus the US dollar, helped to increase the sector's revenue.

The main revenue generators were iron ore (49.1bn reais, up 118% year-on-year), gold (7.5bn reais, up 87.5%), and copper (3.8bn reais, up 65.2%). 

Meanwhile, capex in the sector is expected to reach US$38bn by 2025, Ibram said.

"These capex figures show confidence of mining investors in the projects in the country," Ibram president Flavio Penido told the conference call.