Global Metals & Mining 2025 Outlook_ The battle of mining & minting vs policy & printing

Summary of Global Metals & Mining 2025 Outlook Industry Overview - The report focuses on the Global Metals & Mining industry, providing insights into various commodities and their market dynamics for 2025 [1][6]. Key Insights and Arguments 1. Base Metals Pricing: Base metals and bulks are reasonably priced compared to historical levels, leading to a cautious outlook without strong sector calls. The focus is on stability and quality, with specific outperformers identified: RIO, ABX/GOLD, ANTO, and AAL [1][6]. 2. Precious Metals Performance: Gold is highlighted for its strong price level, while silver shows mixed signals. The performance of these metals is seen as a warning sign compared to base metals and currencies [2][6]. 3. US Economic Policy: The inauguration of Donald Trump is expected to influence inflation, migration, and tariffs, with a predicted increase in the US debt-to-GDP ratio. This environment is anticipated to support metal prices due to a trend towards a weaker dollar [3][31]. 4. China's Economic Outlook: The upcoming 15th five-year plan is expected to address worsening demographic trends and a challenging relationship with the US. The lack of regular stimulus announcements raises concerns about future economic growth [4][32]. 5. European Economic Challenges: The euro is struggling against the dollar, and Germany's elections are set to impact economic growth and social issues in Europe [5][33]. 6. India's Position: India is noted as being well-positioned for growth due to strong GDP performance and favorable demographics [5][34]. Commodity-Specific Outlook 1. Copper: Prices are expected to remain above $8,500 per ton, supported by rising project capex and potential supply deficits by 2030. Key risks include production cuts and supply disruptions [9][30]. 2. **Nickel**: Currently valued below$15,000 per ton, nickel is considered a "value" buy due to low margins and potential production cuts from Indonesia [10][30]. 3. Aluminium: Prices surged due to bauxite export suspensions in Guinea, but long-term support is questioned due to low barriers to entry in smelting [11][30]. 4. Zinc: While zinc outperformed in 2024, an influx of supply in 2025 may temper enthusiasm. Demand is mixed, influenced by steel demand from China and India [12][30]. 5. Gold: Driven by real interest rates and central bank purchases, gold remains a favored investment, especially as a hedge against geopolitical risks [13][30]. 6. Iron Ore: The outlook is cautious, with expectations of increased supply and softening demand from China. Price levels of $80-90 per ton are seen as attractive for increasing exposure [14][30]. 7. Met Coal: Tied to steel demand, met coal's price upside is capped by additional supply expected from 2024 to 2027 [15][30]. Investment Ratings and Price Targets - Outperform Ratings: AAL, ABX, ANTO, BHP, GLEN, and RIO are rated as outperformers with specific price targets reflecting the latest commodity price forecasts [18][24]. - Market-Perform Ratings: BOL, FCX, NEM, and VALE are rated as market performers, with adjusted price targets based on commodity price changes [25][28]. Market Dynamics and Sentiment - The report emphasizes that government policies will significantly influence metal prices in 2025, with a focus on the impact of US tariffs and China's stimulus measures [30][31]. - Despite negative sentiment around China's economy, the mining sector is positioned to benefit from potential government stimulus in housing and infrastructure [47][30]. Conclusion - The Global Metals & Mining industry faces a complex landscape in 2025, influenced by macroeconomic policies, demographic trends, and commodity-specific dynamics. The cautious yet strategic investment approach is recommended, focusing on select outperformers while monitoring broader economic indicators.