RBC still cautious on European miners as iron feels pressure

Boliden AB

05/05/2023 11:19

** RBS expects pressure on the European metal and mining
companies to continue for the rest of H1, even after the
seasonally weak Q1, hampered by a material surplus, lower prices
    ** "Falling oil prices and rising iron ore production won't
help support levels", the broker says, expecting iron ore prices
to keep falling amid a growing surplus
    ** It forecasts an average iron ore price of $78 per tone in
H2 against $106 seen by consensus
    ** Also, robust spending related to the green energy
transition might threaten the distribution of profits
    ** "The cash flow that has provided robust dividends in the
past is now in question", RBC notes
    ** "The strengthening Chinese consumer might defer some
impetus around more primary stimulus in China", RBC says, as the
market has been too optimistic when the China market reopened
    ** The broker prefers base metal miners, like aluminium
maker Norsk Hydro  NHY.OL  ("outpeform") and Antofagasta
 ANTO.L  ("sector perform")
    ** On the other hand, Swedish copper miner Boliden  BOL.ST 
has seen its operational momentum falter, RBC says
    

 (Reporting by Boleslaw Lasocki)
 ((boleslaw.lasocki@tr.com))