CS sees 'risk to the upside' for aluminium, prefers Norsk Hydro over Boliden

Boliden AB

02/03/2023 12:26

** In a commentary on short-term commodities outlook, Credit
Suisse remains cautious on a global recovery of aluminium demand
during 2023 
    ** The brokerage notes, however, an upside risk to aluminium
price forecasts if demand recovers faster than expected and
"elevated Chinese economic activity keeps energy prices high"
    ** For copper, CS sees supply disruptions continuing, but
expects this to drive both sentiment and prices in the near term
    ** The brokerage also expects the zinc concentrate market to
remain in surplus until 2025, but sees a tightening market in
the near term following supply disruptions in Peru 
    ** Credit Suisse adds Norsk Hydro  NHY.OL  and Boliden
 BOL.ST  to its mining coverage, calling them "prominent
European base metal producers"
    ** It starts the first with "outperform," seeing potential
valuation upside in its green businesses, and adds that
depressed aluminium prices provide an "attractive entry point" 
    ** "As aluminium demand bottoms (likely in H2-23), we expect
to see evidence of increased demand in China, and the aluminium
price could also provide a powerful tailwind for shares," CS
says
    ** The brokerage prefers Norsk Hydro and Antofagasta
 ANTO.L  ("neutral") over their Swedish base metal peer Boliden,
which it starts with "underperform" 
    ** Credit Suisse notes Boliden is facing falling free cash
flow in 2023 and uncovered dividend, in addition to depressed
commodity price forecasts


 (Reporting by Greta Rosen Fondahn)
 ((Greta.RosenFondahn@thomsonreuters.com))