On the supply side, we have lowered our 2017 global mine output growth forecast to 1.2% year over year, taking mined supply output to 20.1 Mt, down from 1.8% previously. The risk to this forecast is very much to the downside, with several extant potential disruptions to mine production.
Labor actions continue to threaten production — workers at Antofagasta Plc's Zaldivar mine in Chile have voted to strike, but government-mediated talks will continue until July 20 in an attempt to reach an agreement, as the company did with its Centinela Oxide mine's union. In Canada, workers at Teck Resources Ltd.'s Highland Valley copper mine in British Columbia held a strike vote over the weekend, with management looking for concessions — workers have been without a contract for almost a year. At Grasberg, 6,000 workers have voted to extend their strike into a third month, and issues persist between the Indonesian government and Freeport-McMoRan Inc. regarding mining rights at the mine.
More unforeseeable issues are also affecting production. The Alumbrera mine in Argentina — owned by Glencore Plc (50.0%), Goldcorp Inc. (37.5%) and Yamana Gold Inc. (12.5%) — may be forced to suspend operations due to environmental concerns. Sources also report that a fire at the Tenke Fungurume mine in the Democratic Republic of Congo could affect production. Meanwhile, wildfires in the Cariboo region of Canada have halted production at the Gibraltar mine.
Looking further ahead, our forecast for a refined market deficit in 2018 has deepened, to an 89,000 tonne shortfall, from 40,000 tonnes previously. This is due to lower refined output forecasts for 2017 and 2018. As such, our price forecast has also been raised slightly for next year, to US$5,902/t, up from a previous forecast of US$5,875/t.
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