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Covid19 Impacts

On June 11th 2020

Everyone is asking if the world will "return to normal” after Coronavirus. The answer is that nobody really knows. What we do know though, is that markets do tend to recover after major events and this has been evidenced by history with events such as the Great Depression in 1929, the Wall Street Crash in 1987, and more recently the GFC in 2008. Even though the Coronavirus will continue to impact us all in some shape or form for a while to come, it's likely that industries, such as mining, will rebound as global demand for commodities recovers. The reason for this is that the underlying forces for this demand, such as for coal and iron ore, still exist and are driven mainly by the ongoing growth of the world’s developing nations. 

At the moment we are probably just moving into the phase where demand will pick up. If you look at iron ore, prices have recently increased dramatically from US$80/t two months ago, to current levels of more than US $100/t (largely due to Brazil's inability to produce). On the other hand, prices for ammonia, key to the manufacture of the bulk explosives used to mine iron ore and coal, have dropped (Far East Ammonia index has dropped from $US305/t in March to US $225/t last week). If you’re wondering what this means for you in terms of your explosives purchases, or contract position, we can help. At Moncourt Group, we specialise in all aspects of commercial explosives and can provide deep insights and understanding of the industry to drive down the Total Cost of Ownership for our customers. 

Lucas Bottomley is Principal at Moncourt Group Australia, based in Brisbane and can be contacted on +61 455 99 187 or lbottomley@moncourtgroup.com


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