JPM cuts Boliden on risks from zinc oversupply, cost inflation

Boliden AB

03/03/2023 09:03

** J.P.Morgan downgrades the Swedish mine and smelter
operator Boliden  BOL.ST  to "underweight" from "neutral" on
near-term risks from zinc market oversupply and persistently
high cost inflation
    ** Lower European power prices are likely to drive zinc
smelter restarts, presenting a near-term downside risk to the
zinc market, the brokerage says
    ** It sees global zinc market returning to a surplus of
about 350 kt this year despite Chinese demand rebounding +3% in
2023 vs -4% decline in 2022
    ** JPM sees further risk from Boliden's annual wage
negotiations over Q2 as European inflation remains in high
single digits
    ** However, the broker points out Boliden operates
well-established and well-managed mines, benefiting from a
relatively low-beta smelting business and a strong balance sheet
    ** Out of 21 analysts that cover the stock, three rate it
"strong buy" or "buy", 13 "hold", and five "sell" or "strong
sell"

 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))