Miners have bounced back with a bang at the start of 2023 and how much of it is sustainable will be clearer after updates from Rio Tinto and BHP.
Rio and BHP (Thursday 19) are almost proxies for iron and copper and with prices of both metals rebounding sharply in the past few months on Chinese recovery hopes, the tone should be upbeat.
“While the risk-reward is not as compelling as it was in the fourth quarter, we remain positive on iron ore, based on an expected recovery in domestic demand in China and very limited global supply growth,” said Deutsche Bank.
Copper, too, has bounced by a third over the past six months with if anything, brokers more upbeat over its prospects than iron.
Broker Berenberg typified the change in the mood as it double-upgraded Rio from 'sell' to 'buy' at the start of the month with a price target of 6,700p.
Berenberg said its previous thought that dividend payouts might disappoint now looks unlikely given the higher commodity prices and a better outlook for China.
While BHP is preferred as a business, it is no longer premium-listed in the UK so generalist funds based here will also look towards Rio, believes the broker.
Other miners reporting in the week include copper colossus Antofagasta PLC (LSE:ANTO) on Wednesday and gold mining mid-cap Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF) on Thursday.