Worst likely to be over for commodities, says Vedanta CEO

The worst seems to be over for the commodities market, provided there are no "negative surprises" from China, Vedanta Resources CEO Tom Albanese said today.
"In my view, provided we don't see any negative surprises coming out of China, the worst should be over for commodities," Albanese told PTI here.
Over the past several months, there has been rebound in commodity pricing, he said.
"That rebound corresponded with the slightly improving Chinese economy. In addition, during that period, US dollar has weakened a bit. Two macro factors have probably reduced the negative sentiments that have been there for commodities.
"We have seen some tightening in supply demand characteristics. It is most evident in zinc, where we have seen a reduction of zinc mines around the world and reduction in treatment charges, which indicate there are more buyers and sellers for zinc right now. So we see increase in zinc pricing," he said.

He said the situation was similar in the copper segment as well.

"To some extent, there is same type of trend for copper but not as evident as in zinc. Some stockpiles have been reducing and we have seen Chinese buying copper whenever prices drop low.
"I think over next two to three years, we will see decrease in production from south American mines which will probably help the prices of copper," Albanese added.
About aluminium, he said "there is lot excess Chinese capacity" and hence risk of price drop.
"There is risk for aluminiumthat prices could drop depending on what Chinese would do with their excess capacity.

"For aluminium what is helping us is that there are lot of new applications for it. More and more aluminium is going into automobiles, phones and lots of industrial and consumer products," he said.