We are cautious about the short-term market outlook for our key commodities, but remain confident that economic trends signal positive long-term demand.
Over the next 12 months, directional risks to prices across our diversified portfolio are mixed, with the duration and intensity of Covid-19 a major source of uncertainty.
While we hope that the Covid–19 outbreak is speedily contained within the March quarter, no one can be adamant about the precise timing. There is likely to be a sentiment discount in the prices of our commodities. We support and stand with the Chinese people, especially our partners, customers, colleagues and vendors, and their families, at this difficult time.
In the medium term, we see the need for additional supply – both new and replacement – in most sectors in which we operate.
On the demand side, we see emerging Asia as an opportunity rich region. China, India, ASEAN and the global impact of China’s Belt and Road initiative are all expected to provide additional demand for our products.
Looking even further ahead, our long-term view remains positive.
Population growth and rising living standards are likely to drive demand for energy, metals, and fertilisers for decades to come. And new demand centres will emerge in areas where the twin levers of industrialisation and urbanisation are still developing today.
The electrification of transport and the decarbonisation of stationary power will progress. And the comprehensive stewardship of the biosphere and ethical management of our supply chains will become even more important for building community and investor trust.