Deutsche Bank highlights the mining sector's strong performance through the third quarter, driven by surging commodity prices. However, recent challenges such as rising bond yields and a stronger dollar have introduced macro risks, according to analyst Liam Fitzpatrick.
Despite these macro risks, Fitzpatrick maintains a bullish outlook on copper fundamentals, predicting a potential market squeeze in the coming quarters. Deutsche Bank has adjusted its 2027 price forecasts, raising copper to $14,500 per tonne from $12,500 per tonne and aluminum to $3,050 per tonne from $3,000 per tonne, while trimming iron ore to $98 per tonne from $100 per tonne.
These price adjustments impact earnings projections. Weak prices have slightly shifted mark-to-market earnings risk into negative territory for major miners, while copper-focused companies remain in upgrade territory. Deutsche Bank's 2027 EBITDA estimates for copper names are around 20% above consensus.
Against this backdrop, Deutsche Bank's top picks in the mining sector are Anglo American, Teck Resources, and BHP.