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Liberum takes aim at the miners with three downgrades and an upgrade


Liberum waded into the mining sector Tuesday with three downgrades and an upgrade.

The broker believes the market has over-estimated the price support for iron ore and underestimated it for platinum group metals (PGM).

So, it has moved to ‘sell’ on Rio Tinto (LON:RIO) and ‘hold’ on both Antofagasta (LON:ANTO) and KAZ Minerals (LON:KAZ).

On the upside, it is now a ‘buyer’ of Anglo American (LON:AAL).

As part of its industry overview, it said the iron ore market is now “visibly easing” as it predicted the price will head down towards a “marginal” US$50 a tonne from around US$120 currently.

“This is a slower deterioration than we previously forecast and will also be partially offset by improving premiums for lump and pellet,” it added.

Its copper prediction of US$3 per pound (static) is underpinned by concentrate restocking.

“We remain positive on palladium and rhodium on three-to-five-year view on the robust supply and demand fundamentals, but market pricing in more imminent falls,” Liberum said in a note to clients.

Coal, it added, is supported by “supply discipline” but it also noted, “there is nothing to suggest a sustainable price recovery above marginal cost”.

Diamonds, meanwhile “have shown signs of recovery from the lows”; however, Liberum said the outlook “will be very challenging for years to come as synthetics grab an increasing share of the market”.

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