Home >Companies >People >Vedanta CEO says commodities ‘still searching for the bottom’

London: Vedanta Resources Plc chief executive officer Tom Albanese says metals markets are yet to reach a trough as producers battle to stay afloat with slowing Chinese demand and a looming US interest-rate increase that’s curbing the appeal of commodities.

“The markets are still searching for the bottom," Albanese, CEO of India’s biggest aluminum and copper producer, said in an interview with Bloomberg Television in London on Tuesday. “Supply is going to take some time to work out. It’s going to take some time before we see what actually happens with the Chinese economy. Is it a soft landing or is it something that’s more disruptive?"

Some of the world’s biggest mining companies are reacting to the slump in raw materials prices by shuttering production, scrapping dividends and reining in spending. China’s slowest economic growth in a generation has led to oversupplies of metals and sent prices of copper and aluminum to six-year lows, while nickel is near the lowest in more than a decade.

A potential rate increase by the Federal Reserve later this month will also be a “market-making event" for commodities, Albanese said. Odds of a move at the Fed’s 15-16 December meeting are 74%, Fed-fund futures data show.

“In this environment, you just knuckle down and you trim the costs," Albanese said. “I am comfortable to say that we will see a lower cost profile in the second half than we had in the first half."

Vedanta said last month it will pay no interim dividend after revenue declined because of a rout in prices. Earnings before interest, taxes, depreciation and amortization fell 39% to $1.29 billion in the six months through September from a year earlier, the London-based company, controlled by billionaire Anil Agarwal, said. Sales dropped 12% to $5.7 billion. Bloomberg

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Edit Profile
My ReadsRedeem a Gift CardLogout