Currency and Oil Price Rise Putting Pressure on Miners - March 2016

Currency and Oil Price Rise Putting Pressure on Miners Many mining companies are being pressured by the recent rise in currency and in oil prices. The falling value of the US dollar and the rising price of oil has made it difficult for many companies to continue resulting in the closing of more companies.

Price of commodities like iron ore, coal, and copper have all fallen by about 20-50% in the last year making it difficult for many companies to stay afloat. Many companies have started to sell off commodities to help offset the costs but this strategy is not working either as the value of commodity currencies has fallen as well by 20-60%.

Central banks have also started to put the squeeze on mines as they have started to lower demand curves and lift supply curves which could offset the entire system. Central Banks in developed markets have started preparing for the fall in the mining industry in a big way that actually ends up undermining the commodities consumer exchange rates.

While other countries seem to be expanding and recovering, the US mining industry has yet to see an upward drift and has yet to begin to really recover from the decline that occurred in 2015. Though only time will tell, it seems now that the outlook is bleak and unless things start changing now, it is likely not to improve in any near future. So far the market has not had enough time to truly create a picture of what is to come but we can only hope it is up from here.