JPMorgan Turns Bullish On European Miners, Sees Copper Rally As Key Catalyst

JPMorgan Research has upgraded its outlook for European mining equities, shifting more positive in February and then upgrading the outlook to Overweight in March. The research team cited a pattern of the sector outperforming through economic turbulences, believing a historical pattern could repeat.

Yet analysts acknowledge that the prediction hinges on the timing of China’s policy response—an important factor since its economy accounts for over 50% of global demand for most industrial metals. JPMorgan forecasts the reaction will focus on fiscal and monetary easing rather than property sector stimulus.

Owing to U.S. tariff policies, the bank now sees a 40% chance of a domestic recession this year, and China's GDP slowdown to 3% in Q2, down from 6.6% in Q1. With reciprocal tariffs, the effective rate on Chinese goods has now jumped to 54%, close to the bank's base case scenario of 60%.

Analysts have pointed out that European miners face limited direct exposure, although Rio Tinto's RIO Canadian aluminum operations are affected. Still, the sector's upside depends on copper price stability. A sustained copper rally could present a multi-year entry point, but downside risks include demand destruction from a global recession and a weaker Chinese yuan, which historically correlates with lower metal prices.

The bank highlights Antofagasta ANFGF as its Overweight pick, citing its 15–30% volume growth through 2027–28 and attractive valuation as its Centinela expansion ramps up. It also favors Lundin Mining LUNMF, arguing it trades at a discount, close to 5X EV/EBITDA, compared to peers, which trade at 9-10X. Furthermore, it faces reduced governance risks following Vicuña transactions. Regarding the sector leaders, they're Overweight Rio Tinto (citing inexpensive valuation and high copper upside) and Neutral on Anglo American and BHP.

On the downside, the bank is Underweight Boliden, pointing to lower treatment and refining charges, exposure to zinc, and integration challenges after acquiring Lundin's two European mines for $1.5 billion last year.

The bank remains bullish on EMEA gold miners, projecting a 30% rise in gold prices to ~$4,000/oz amid geopolitical and macroeconomic uncertainty. The top pick is Fresnillo FNLPF, which it sees benefiting from potential Mexican peso weakness.

European steel equities are less favored due to direct tariff exposure, particularly in auto-dependent firms like ThyssenKrupp and Voestalpine (~30–40% revenue exposure). Furthermore, the bank sees ArcelorMittal facing $400 million in annual EBITDA headwinds from tariffs, but clarifies that SSAB stands out with 45% of EBITDA from the U.S. infrastructure and defense sectors, insulating it from broader tariff risks.

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