Global Metals & Mining: Our reversion master implies things are as good as they get

Research evidence excerpt

Global Metals & Mining: Our reversion master implies things are as good as they get

29 June 2026

Global Metals & Mining

Global Metals & Mining: Our reversion master implies things are

as good as they get

Equity markets are in consolidation as investors reassess the risk of a Fed rate hike. Over Bob Brackett, Ph.D.

+1 917 344 8422 the past four months, expectations have shifted sharply - from three rate cuts to pricing in

bob.brackett@bernsteinsg.com one hike in 2026. Against this backdrop, it feels timely to revisit our proprietary 40-year

“reversion master model” to assess margin of safety and identify more attractive entry points.

Andrianto Guntoro, CFA

+44 20 7676 6825 The shift in rate expectations has weighed on risk appetite and pressured andrianto.guntoro@bernsteinsg.com

commodities—particularly gold and copper. Aluminium has also corrected (~15% in

June), partly driven by the Iran–US peace deal. In nickel, Indonesia’s increase in mining

quotas (from 260Mt to 360Mt) has added worries about supply. Meanwhile, iron ore has

slipped below $100/t as earlier cost support from elevated freight rates has eased.

The floor of commodity prices are set by the cost curves (Exhibit 4). If price falls into

the cost curve the marginal mines (or smelters) lose money for every tonne of metal they

produce, so they send their workers home and call it a day (supporting price). Some metals

behave well (e.g., copper), and some less well (aluminium). But broadly speaking, the floor

of metal prices is the 90th percentile cash cost (Exhibit 5). We exclude gold (therefore ABX

& NEM), in this analysis as we don't believe the cost curve determines the price of gold

(Exhibit 17). We highlight the sell-off in NEM has been broadly in-line with the decline in

gold prices YTD.