Vedanta CEO Sees Commodity Rout Continuing Up to Two More Years

(Bloomberg) by Firat Kayakiran – Vedanta Resources Plc expects the slump in commodity prices to continue for one or two more years as a supply glut persists. “The markets have been more affected by the oversupply in the past two or three years than by dropping demand,” Chief Executive Officer Tom Albanese said on a conference call. It will take time to absorb the excess oil and iron ore, and to a lesser extent copper and other metals, he said. Commodity-market weakness has pushed producers to cut investments and defer or cancel projects. The past year’s 40 percent tumble in crude prices, in particular, has hurt Vedanta, which reported a wider full-year loss on Thursday because of impairment charges at its Cairn India oil unit.  Copper and zinc markets will recover sooner than oil and iron ore because of supply constraints, according to Albanese, who ran Rio Tinto Group before taking the helm at Vedanta last year. Some large zinc mines are closing this year, reducing global supply, while water shortages and community opposition have disrupted copper production in Latin America, he said. Vedanta’s net loss expanded to $1.8 billion in the fiscal year through March from $196 million a year … continue reading

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