HSI Dips 63 Points at Midday, While Robotics and Metal Stocks Perform Well

JPMorgan's bullish outlook on copper prices and related stocks is driven by several factors: strong demand, severe supply disruptions, and reduced smelting capacity in China. The firm maintains an Overweight rating on ZIJIN MINING and CMOC due to their expected earnings growth and diversified assets in copper, gold, and cobalt. ZIJIN MINING is highlighted as a top pick because of its reasonable valuation. Conversely, an Underweight rating is assigned to JIANGXI COPPER due to persistently weak treatment and refining charges, along with slowed profit growth.

The analyst rating from Morgan Stanley is based on the expectation that the strict limitations on new copper smelting capacity and the planned shutdown of approximately 2 million tons of illegally constructed copper smelting capacity in China will positively impact copper prices. This, in turn, is anticipated to benefit major copper producers, leading to an expected rise in the share prices of JIANGXI COPPER and CMOC within the next 15 days, with a probability of 70-80% for this scenario. Consequently, Morgan Stanley rated both stocks as Overweight, with target prices set at $37.3 for JIANGXI COPPER and $18.6 for CMOC.

The analyst rating from UBS is based on the adjustment of copper price forecasts due to tightening industry fundamentals. This tightening is attributed to several factors: reduced production guidance from Indonesia's Grasberg mine, accidents at the Kamoa Kakula mine in the Democratic Republic of Congo and Chile's El Teniente mine, and protests in Peru. These issues are expected to exacerbate short-term supply risks for copper mines, leading to an increase in earnings estimates for companies like ZIJIN MINING, CMOC, and JIANGXI COPPER, all of which were rated as "Buy."