State of the Market: Mining Q4'24

During the December quarter, the US dollar exhibited robust performance, with the US Dollar Index (DXY) increasing by 7.2% over the period. Even with the US Federal Reserve implementing two rounds of 25 basis point interest rate cuts in November and December, worries regarding the possible inflationary measures of the new US administration, along with the relative strength of the US economy compared with its major counterparts, have contributed to the dollar's comeback.

The strength of the US dollar, along with the uncertain economic outlook in China and Europe, exerted downward pressure on most industrial metals prices. Tin, nickel, and copper experienced the most significant declines, with prices falling by 13.3%, 11.2%, and 10.9%, respectively, during the December quarter. Even gold, which had seen an impressive appreciation of 29.4% in the first nine months of 2024 due to its safe haven appeal, experienced a minor pullback, decreasing by 1.5% over the final quarter.

These price pressures, which have already resulted in some reductions in mined supply, especially for higher-cost operations, will persist as challenges for the sector and for governments that are ramping up their policy initiatives to foster the development of new supply chains for critical minerals. The S&P/TSX Global Mining Index also mirrored the downturn in metal prices, declining 10.6% during the December quarter.

Even though China has continued to implement additional stimulus initiatives, markets seem skeptical about the adequacy of the fiscal and monetary measures taken. The CSI 300 Index, which rallied significantly at the end of September 2024 following the government's initial announcement of supportive policies, has since declined, although it remains around 20% higher than its recent low in mid-September. 

On a positive note, global drilling activity increased 4.0% quarter over quarter following three consecutive periods of decline. Copper, gold, lead-zinc, silver, and nickel contributed to the rise in activity.

Join our analysts as we provide a recap of the December 2024 quarter, provide our near-term outlook and discuss key trends and topics:

• Commodity price trends, drivers and estimates
• M&A and mining financing
• Exploration and development metrics