Moody's Investors Service has changed its outlook for the global base metals industry to stable from negative. Its August 18th report titled "Global Base Metals Industry: Prices Off Bottom But Upside Limited as Global Economy Faces Slow Recovery", says prices for copper, nickel, zinc and aluminium are unlikely to deteriorate further over the medium term. "We view prices for base metals as having likely bottomed following the sharp decline beginning late last year, and consequently we have revised our price sensitivity assumptions," says Carol Cowan, Senior Vice President and the author of the Moody’s report. "That being said, challenging industry conditions should continue through at least 2018 until the industry can recalibrate the supply levels to match demand." All base metals, with the exception of zinc, will remain oversupplied, with exchange inventories staying high, according to the report. The major driver of the recent price stabilization is positive investor sentiment and growth expectations from China, the world’s major producer and consumer of base metals. "China continues to drive investor sentiment toward base metals," says Cowan. "Stimulus measures from the government including easing of credit, reducing reserve requirements and increasing infrastructure spending have helped offset the country's decelerating GDP trajectory.” Moody's recently revised expectations for Chinese GDP expansion upwards to 6.6% and 6.3% in 2016 and 2017 respectively, from 6.3% and 6.1% previously, but says downside risk for the world's number two economy remains. In January 2016, Moody's started a sector-wide review of 87 global mining majors and by the end of the first quarter 2016, axing debt ratings for 30 companies including Rio Tinto, BHP Billiton, , Anglo American, Vale and Chile's state-owned Codelco. Only 19 organizations in the sector currently retain investment grade ratings, although Moody's recently changed a number of companies' outlook to positive, notably Anglo American, thanks to its asset sales. Moody's has adjusted the price sensitivities by which it measures mining companies' operating performance over the medium term and now sees copper bottoming at $2.00/lb with metal sensitivity ranges of: Metal Moody’s Range Through 2018 Copper US $ 2.15 to 2.35/lb Nickel US $ 4.20 to 5.00/lb Zinc US $ 0.70 to 0.75/lb Aluminium US $ 0.80 to 0.90/lb The ratings agency also predicts that metallurgical coal, copper and nickel will edge up in price by 2017, while thermal coal, aluminium, and zinc will hold steady. The outlook for iron ore, mined in vast quantities by Rio Tinto, Vale and BHP Billiton, is less bright: Moody’s expects it to slip from an average of US$50 a tonne this year to US$45 a tonne over the next two years. Better-than-expected prices this year have given the mining industry a lift after a dire 2015. The major London-listed miners have all enjoyed large increases in their share prices despite poor earnings results recently reported by Glencore, RTZ and BHP.