Miners’ output costs have dropped more than industry consensus due to lower energy prices and weak emerging market currencies, a report by Societe Generale showed, suggesting metals prices have further to fall before miners are forced out of business.

The prices of many metals are still around one third higher than the critical cost floor at which the top ten percent most expensive mining operations are losing money.

Prices must hold below this key level for an extended period before miners are forced to cut output or shut up shop.

“At the beginning of last year, the view was that metals like alumimium and zinc were well supported by their cost curves, while copper was way above its cost floor - and still is. But people are now realizing that cost floors are much lower due to falling oil and commodity currencies,” Mark Keenan of Societe Generale in Singapore told Reuters.

“The likelihood that mine supply will also be cut as a result of weak pricing has also fallen – therefore prices are vulnerable,” he said.

Approximately 75% of mining costs are paid for in local currency, while energy – usually diesel – accounts for some 15% of costs, Keenan said. Diesel prices have halved since this time last year.

Societe Generale puts the copper price floor at $3,469 a tonne, down 15% from industry consensus of $4 500, and 34% higher than current prices. LME copper traded at $5 239 a tonne on Friday, having shed around 9% in July.

The report comes amid mounting bearish sentiment towards metals in light of China’s stuttering economic growth. Copper prices hit six-year lows this month after Goldman Sachs slashed its copper price outlook to $4 500 a tonne by the end of next year.

For aluminium, costs now sit at $1 119, down 31% from current LME prices at $1 633.

Nickel costs are at $7 759 a tonne, down 29% from $11 000 currently, while the zinc floor is seen at $1 239 a tonne, down 36% from LME zinc at $1 944.

• [Editor:Juan]