Metals and mining sector may usher in a new round of revaluation! Deutsche Bank raises copper and aluminum price forecasts; CHINAHONGQIAO (01378) named top pick among aluminum stocks.

Deutsche Bank Aktiengesellschaft recently released a research report stating that the metals and mining sector performed strongly in the third quarter and year-to-date, mainly driven by surging copper prices, but recent rising bond yields and a stronger US dollar have put some pressure on the market. In the report, the bank updated its forecasts for copper, aluminum, and iron ore prices, and listed its top picks in the metals and mining sector. Deutsche Bank noted that CHINAHONGQIAO (01378) is its top pick among aluminum stocks, mainly due to its valuation and potential cash returns. Deutsche Bank assigns a "Buy" rating to the stock with a target price of HK$33. Updated Price Forecasts Deutsche Bank raised its 2027 copper price forecast from US$12,500 per tonne to US$14,500 per tonne. Deutsche Bank stated that, as it elaborated at its recent copper industry conference, the copper market is facing severe supply tightness due to factors including rapid US inventory accumulation, low inventories in the rest of the world, and weak supply. Persistently poor global mine production remains a key factor supporting market fundamentals, and an incentive price mechanism will continue to exist. US tariff policy remains a key variable for the market. The bank's base case remains that tariff policy uncertainty will persist, thereby keeping the physical market tight and driving copper prices higher. Deutsche Bank raised its 2027 aluminum price forecast from US$3,000 per tonne to US$3,050 per tonne. Deutsche Bank noted that over the past 3 to 6 months, aluminum prices have significantly lagged other base metals. The initial supply shock caused by the US-Iran war has now gradually become a distant memory. The bank expects that Gulf region production will steadily recover over the next 6 months, while new projects in Indonesia come on stream, which will push the market into oversupply next year and exert downward pressure on aluminum prices. Deutsche Bank lowered its 2027 iron ore price forecast from US$100 per tonne to US$98 per tonne. Deutsche Bank noted that iron ore prices remain under pressure, with FOB margins having fallen to their lowest level since 2019. At current freight and input cost levels, a considerable portion of high-cost capacity is operating at a loss, which should limit the downside for iron ore prices; at the same time, winter restocking may provide some support to prices in the fourth quarter. Due to weak demand and the gradual ramp-up of production at Guinea's Simandou mine, the bank expects iron ore prices to remain suppressed near the cost curve for the foreseeable future. Top Picks CHINAHONGQIAO Deutsche Bank noted that CHINAHONGQIAO (01378) is its top pick among aluminum stocks, mainly due to its valuation and potential cash returns. Deutsche Bank assigns a "Buy" rating to the stock with a target price of HK$33. Anglo Teck Anglo Teck, the new mining company planned to be formed by the merger of Anglo American and Teck Resources, will become one of the world's major copper producers after the merger. The two companies officially announced the merger agreement on September 9, 2025. The parties plan to complete the transaction by March 2027 at the latest. Deutsche Bank believes that if the merger is successfully completed, it will create the world's premier listed copper company, whose growth potential is currently undervalued and which has the potential for further valuation re-rating. Deutsche Bank assigns a "Buy" rating to the stock with a target price of 47. Glencore Deutsche Bank noted that it remains bullish on Glencore's bottom-up investment thesis, including: progress on asset divestitures in the short term should help improve shareholder returns; a listing on the Australian Securities Exchange (ASX) could drive a modest re-rating of the company's valuation over time; copper production is expected to increase significantly over the next 12 to 18 months; and merger negotiations with Rio Tinto plc Sponsored ADR may restart at some stage in the future. However, further news regarding the Radiant World legal dispute remains a key short-term risk factor. Deutsche Bank assigns a "Buy" rating to the stock with a target price of 6.80. BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs Deutsche Bank stated that BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs (BHP.US) has already experienced a significant valuation re-rating this year, and its current valuation appears relatively full, especially considering recent weakness in iron ore prices. Freeport-McMoRan Among copper miners, Deutsche Bank believes that Freeport-McMoRan (FCX.US) still offers attractive relative value. Production at the Grasberg mine is expected to steadily recover to pre-incident levels by the end of 2027. Deutsche Bank assigns a "Buy" rating to the stock with a target price of US$80. First Quantum Minerals Deutsche Bank continues to believe that First Quantum Minerals' risk-reward is attractive, although progress in negotiations with the Panamanian government will of course remain a key factor.