The COVID-19 outbreak has shrouded our short-term outlook in uncertainty, but we remain confident that economic trends signal positive long-term demand for our commodities.
Recovery will vary considerably by country, which will affect demand for commodities. For the 12 months ahead, we assess that weighted directional risks to prices across our diversified portfolio are mixed, hopefully with the worst of the physical demand shock from COVID–19 behind us.
In the medium term, we continue to see the need for additional supply – both new and replacement – to be induced across most of the sectors which we operate in. Developing Asia remains an opportunity rich region. China, India, ASEAN, and the global impact of China’s Belt and Road initiative are expected to provide additional demand for our products. We also anticipate a popular mandate for a more open international trading environment, along with a concerted effort to confront climate change head on.
Against this backdrop, the basic elements of our positive long–term view remain in place.
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 where the twin levers of industrialisation and urbanisation are still developing today.
The electrification of transport and the decarbonisation of stationary power are expected to progress rapidly, 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.