JP Morgan has reversed its positive stance on EMEA Mining and Steel equities, downgrading Anglo American PLC (LSE:AAL) to 'underweight', Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) to 'neutral' and Antofagasta PLC (LSE:ANTO) to 'neutral' in a sweeping sector note that analysts say could have echoes of the brutal 2022 drawdown.
Anglo was down 5.4%, followed by Anto (off 4.4%) and Rio, which fell 3.8%.
The bank's analysts argue that events in the Middle East introduce risks that are not adequately priced into industrial metals or the UK-listed miners that depend on them.
JPM now forecasts copper falling to $9,500 per tonne in 2026 and 2027, and iron ore to $90 per tonne, setting these as its new base case rather than a downside scenario.
The bank warns of more than 10% further downside for the sector, even after European mining and metals stocks fell 9% in the prior week, making it the worst-performing segment of the MSCI Europe index.
Anglo American carries the most direct exposure to the commodities at the heart of the bear case.
The company is mid-restructure, having sold its platinum group metals business and still working to offload De Beers and its remaining steelmaking coal mines, leaving it increasingly concentrated in copper and iron ore at precisely the moment JP Morgan is most cautious on both.
Rio is being penalised primarily for its iron ore exposure, with JPM introducing a lower iron ore price into its forecasts.
The bank acknowledges Rio's aluminium business as a relative positive given Middle East supply disruptions, but this is not enough to hold the overweight rating.
Antofagasta, removed from JP Morgan's analyst focus list, is caught in a deteriorating short-term picture for copper despite what the bank still describes as a compelling long-term structural story.
The US bank points to rising global copper inventories, weak Chinese spot premia and a market it expects to swing back into surplus by 2027 as reasons to step back from its previously bullish copper miner positioning.