METALS INSIGHTS : MARKETING FEEDBACK, EU PMI

Research evidence excerpt

METALS INSIGHTS : MARKETING FEEDBACK, EU PMI

RESEARCH

METALS & MINING

On the road

We spent the last three days seeing >30 clients across Paris and Frankfurt. Interest in the sector remains high with most incoming

questions on base and precious metal exposure.

Interest is high, Hormuz an unknown

Meetings were constructive with most investors taking a medium- to long-term view that the sector is in good shape. There was no real

consensus on when and how the conflict in the Middle East will end so most meetings were under the narrative of “assuming this

doesn’t last long enough for the market to trade a global recessionary environment.”

Copper continues to dominate

We received the most incoming questions on copper and while there was some concern that current spot copper prices (USD

13,595/t) could see some downside in the near-term, the medium-term outlook remains supportive. There wasn’t much pushback to

our recent First Quantum (+) upgrade (here) though there was some trepidation amongst the predominantly long only investor

meetings about getting involved prior to knowing with certainty what the new mining contract will look like at Cobre Panama. Anglo

American (+) routinely came up in meetings and was favoured amongst the current diversified miners for its portfolio pivot towards

copper and pending merger with Teck Resources (NC). Glencore (+) tends to face more ESG related constraints amongst investors

on the continent but there was an acknowledgement of its portfolio being strongly positioned for the current move in energy markets

and its marketing business. Aluminium remains in a higher for longer pricing environment, in our opinion, and we continue to prefer

Norsk Hydro (+) for that exposure.

Gold gaining traction again