- ECONOMIC IMPACT -

Latest update: 17 February

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.

4.8%

The Japanese economy expanded by 3% (YoY) in Q4 2020, however economic growth for the full year shrunk by 4.8%.

4.4%

The Conference Board forecasts the economic growth rate of the US at at 4.4% and 3.1% for 2021 and 2022, respectively.

Impact of Covid-19 on employment outlook

- SECTOR IMPACT: MINING -

Latest update: 3 February

demand side impact

4.5%

GlobalData expects that global construction output will expand by 4.5% in 2021, following the estimated contraction of 2.9% recorded in 2020. Global construction output excluding China is estimated to have shrunk by 5.3% and is projected to grow by 3.6% in 2021.

7%

The slowdown in construction led to an estimated 2% decline in copper demand and 2.8% drop in iron ore demand, while coal demand fell by an estimated 4.8%. Demand for platinum was estimated to have fallen by 7%, with a significant decline in production in the auto sector driving down demand.

Supply side impacts

Suspensions of mining were enforced in a range of markets during
late Q1 and early Q2 as governments looked to contain the spread of
the coronavirus. As of mid-April, some 1,542 mines were on hold, but
this had come down to less than 50 by the end of 2020.


Production was down for most commodities. Copper output was
estimated to have dropped by 2.6% and iron ore production by 2.5%,
with the impact in the latter primarily in Brazil. Recoveries are
expected in 2021, with mined copper production to rise by 5.6% and
iron ore by 4.7%. 


Coal production was estimated to have fallen by over 5% in 2020 and,
while it will recover, with a forecast growth of 6.6% in 2021,
production is still expected at below 2019 levels.

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 2020, 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 all time high of $2,064/troy oz on 6 August 2020. 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 and was $1,860/oz on 31 January 2021.


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 2020 to $1,773/t on 25 March, aluminium 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, with copper at $7,827/t at the start of February 2021.


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 2020 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 and were over $170/t in January 2021 before dropping back to $154.74 on 1 February.

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