BMI View: The United States' mining industry value will continue to contract through 2017, as muted production growth in the gold and copper sectors fails to offset sharp declines in coal output.
|e/f = BMI estimate/forecast. Source: BEA, BMI|
|Mining Industry Value, USDbn||133.50||126.40||130.20||113.80||98.20||92.30||94.40||95.80||97.70|
|Mining Industry Value, USDbn, % y-o-y||-2.00||-5.00||3.00||-13.00||-14.00||-6.00||2.00||2.00||2.00|
Latest Updates & Structural Trends
The US' mining industry value will decline through 2017, as elevated costs and structurally lower mineral prices weigh on growth. In particular, the declining coal sector, which accounts for nearly two thirds of the US mining industry value, will drag down mining industry value, which we forecast to contract by an average of 0.6% annually over 2017-2020. In absolute terms, we expect the US mining industry value to stagnate, totalling USD97.7bn by 2020 compared to an estimated USD98.2bn in 2016.
US coal production will continue to contract due to persistently weak thermal and metallurgical coal prices, significant coal stockpiles and competitively cheap natural gas. We forecast US coal production to maintain a steady decline, averaging a 2.5% contraction over 2017-2020. In terms of volume, we expect the US to produce 625 million tonnes (mnt) of coal in 2017 and only 588mnt by 2020, compared to a peak of 1.1 billion tonnes in 2008.
US copper production will edge higher over the coming years, supported by copper price stabilisation and major miners' efforts to cut costs and maintain output. We forecast US copper output to edge higher, totalling 1.3mnt in 2017 and reaching 1.4mnt by 2020, averaging 2.6% annual growth. Over the first seven months of 2016, the country's copper production increased by 3.8% to 815 thousand tonnes (kt).
Meanwhile, the lead industry will remain bogged down by weak prices and tightening environmental regulations. The US lead industry will also face headwinds from increasing competition from recycled products, as environmental awareness translates into sustainable development.
We expect Democratic nominee, Hillary Clinton, to win the 2016 presidential election in November, and as such expect environmental regulations to continue to tighten. Clinton has expressed support for Obama's environmental initiatives, the full implementation of which will accelerate the decline of the coal industry.
The United States Mining Report has been researched at source and features BMI Research's mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.
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Summary of BMI’s key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.
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Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.
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Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
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