...China is Key Driver: Both the sector and rating outlooks for mining in 2016 remain firmly negative. This reflects Fitch Ratings' view that Chinese demand for commodities will continue to weaken as the economy undergoes a gradual deleveraging and adjustment from investment- to consumer-led growth. Fitch forecasts Chinese GDP growth of 6.3% in 2016 compared to 6.8% in the current year. The slowdown in Chinese demand has created substantial oversupply in some sub-sectors and in some cases is leading to growing Chinese exports. Pricing Trends Remain Negative: We expect prices for most commodities to be weaker on average in 2016 compared to 2015. For iron ore and aluminium this primarily reflects market oversupply, while for copper and zinc it reflects concerns about the strength of Chinese demand together with negative investment sentiment. A possible exception is nickel where falling Chinese nickel pig iron (NPI) production and potential mine closures could see an increase in prices. Material...
