Monday Mining Minutes: Consensus commodity prices diverging vs spot prices

Consensus commodity price forecasts are currently about 4% above spot prices on average. Divergence in 2027 forecasts is greatest in precious metals, with palladium +28%, platinum +25% and gold +16%, versus coking coal -15%. Bulks and base metals are mixed but mostly lower, notably thermal coal -14%, coking coal -15% and zinc -5%. If spot prices hold at current levels through 2027, thermal coal, coking coal and zinc producers could benefit, followed by copper producers, while PGM/gold miners could face downward pressure from mark-to-market earnings momentum; Glencore, ANTO and Thungela could have mark-to-market upside risk. Rio Tinto approved the US$1.9bn Kangwinan bauxite project in Queensland, adding 20mtpa of capacity at Weipa, with first production in 2029 and full production by 2032; group bauxite capacity is still expected to decline by about 6mtpa after 2032. Citi maintains Neutral on Rio Tinto with target prices of A$155 (RIO.AX) and £67 (RIO.L).