This year’s respite from the commodities rout is a “bit overdone” and investors should watch out for further retracement, the CEO of one of the world’s largest natural resources companies told CNBC on Saturday.
Crude oil prices have largely rallied since mid-January, after a steep and lengthy rout from June 2014 onward hit commodities across the board.
Other commodities such as zinc, copper and iron ore have also pared some losses this year.
“I would guess these moves are a little bit too fast — they are a bit overdone,” Tom Albanese, the chief executive of Vedanta Resources, told CNBC Africa at the London Business School’s Africa Business Summit.
“I wouldn’t be surprised if we see some retracement,” he added, saying cues could be further signs of slowdown in China’s economy or the U.S. Federal Reserve raising interest rates again in June. He was optimistic, however, that crude oil prices would not fall to the depths below $29 per barrel reached around the start of the year.
“I’m hoping the lows seen in December and January were the lowest of the cycle,” Albanese said.
Vedanta’s main interests lie in copper, zinc, silver, aluminium, oil and gas and iron ore. Its operations span India, Zambia, Namibia, South Africa, Liberia, Ireland and Australia and it is listed on the London Stock Exchange.
Albanese was previously CEO of Rio Tinto, from which he resigned in January 2013 after the Anglo-Australian mining giant clocked up around $14 billion in write-downs.