Earnings estimates for the large cap mining sector have been raised across the board by Deutsche Bank due to support for the market from China and tight supply.
"With policy makers in China recently adopting a more supportive stance, we expect commodity consumption to recover through 2022 from current depressed levels, adjoined by a larger than usual post-winter rebound in activity, a global recovery in auto volumes and ongoing supply chain disruptions," analysts at the bank said in a note to clients on Tuesday.
"Investors will also have to contend with at least a partial unwind of the current extreme energy tightness and a potentially less disruptive approach from China towards emission targets."
In this setting, the Deutsche mining analysts said their top commodity picks for the first half of 2022 reflect a combination of China leverage, tight supply and autos exposure (copper, iron ore, platinum) against commodities facing looser supply conditions (and a reduced 'supply risk premium') through the year (zinc, coking coal and oil).
London-listed companies with 'buy' ratings from the bank are limited to Anglo American PLC (LSE:AAL), where the price target was hiked from 3300p to 3500p, and Glencore PLC (LSE:GLEN), where the target was lifted from 440p to 450p.
Elsewhere BHP Group PLC (LSE:BHP) and Rio Tinto PLC (LSE:RIO) both remained at 'hold' but their targets lifted from 2000p to 2100p, and from 5200p to 5400p respectively.
There were two downgrades, with Sweden's Boliden cut from 'hold to 'sell' with a SEK330 target; and Canada's Lundin Mining, cut from 'buy' to 'hold' with a target of C$10.5.