- ECONOMIC IMPACT -

Latest update: 16 December

While current consensus forecast for global GDP remains negative, many countries are seeing their own GDP level off after weeks of decline.

Polls show that employment prospects have consistently improved since July, with most employees favouring working remotely full-time.

21%

According to the World Trade Organization, merchandise exports declined by 21%
YoY in Q2 2020.

0.4%

Real GDP growth in the UK slowed to 0.4% in October from the 1.1% growth recorded in
September 2020.

Impact of Covid-19 on employment outlook

- SECTOR IMPACT: MINING -

Latest update: 8 January

demand side impact

2.9%

The current forecast for global construction output growth is a decline of 2.9%, versus initial expectations of growth of 3.1% for 2020.
Excluding China, the decline would be 5.3%.

-3%

The slowdown in construction is forecast to result in copper and iron ore demand having fallen by 3% across 2020. Whilst lower automotive manufacturing will also impact demand for steel, aluminium, platinum, and palladium. Platinum demand is forecast to have declined by 7% in 2020, with light vehicle sales estimated to have fallen by 31.3% in Q2.

operational impacts

Mining companies are undertaking a range of measures to minimise the potential for infections and the impact of Covid-19 on mining operations. However, despite efforts to minimise the spread of the virus, cases are still being identified.


For example, as of 4 January 2021, the Minerals Council of South
Africa reported a total of 19,905 cases, of which 367 were active – a
significant increase on mid-December. There have been a total of 206
deaths across the mining sector, while over 66,000 tests had been
taken at mines across South Africa, equal to 14% of workers.

Key commodity developments

ICE thermal coal futures dropped by 11.2% from $76.26/t on 1 January to $67.72/t on 31 January, due to fears of lockdown in industrial hubs. The price recovered to $74.36/t, after action to contain the virus and revive industrial activity in
China. The price then slipped again to $58/t in late August but recovered in Q4 and was over $80/t at the end of the year.


The gold price had benefited from its status as a safe haven with concerns of a second wave leading to prices reaching an alltime high of $2,064/troy oz on 6 August. Since then, prices have dropped back, falling steeply in November after
announcements of successful progress with a Covid-19 vaccine. The gold price closed on $1,896/oz on 31 December.


Base metal prices were hardest hit by the reduced demand from the industrial, transportation and construction sectors. Zinc prices dropped by 28% from $2,466/t on 22 January to $1,773/t on 25 March, aluminum prices fell 21% from 22 January to 9 April to $1,428/t and copper prices fell by 27% from $6,300/t on 16 January to $4,617/t on 23 March. However, prices of all three stabilised and all were above their pre-Covid levels by the end of the year.


The spread of Covid-19 across China and weak end-user demand for finished steel negatively impacted iron ore with iron ore fines 62% Fe CFR Futures on the CME exchange falling by 15.8% from $94.81/t on 17 January to $78.33/t on 3 February. However, concerns over supplies from Brazil and resumption of steel making capacities across China pushed prices higher. Prices rose steeply in December to reach $155.57/t on 29 December.

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