J.P. Morgan Turns Bullish on Mining, Upgrades Sector to “Overweight”

J.P. Morgan sees a sharp turnaround for mining stocks, driven by surging metal prices and China’s economic stimulus.

Editorial Team (ET)May 8, 2025

J.P. Morgan has made a decisive shift in its outlook for the mining and metals sector, upgrading its stance to “overweight” from the previous “underweight” position. The investment bank’s latest report underscores a growing confidence in the sector’s recovery, fueled by economic policy support in China and an anticipated surge in commodity prices, particularly copper.

The upgrade comes after a prolonged period of underperformance in mining equities relative to broader markets and industrial metals. Since January 2023, the sector has lagged the MSCI Europe Index by around 50% in U.S. dollar terms. Even more striking, since early 2024, mining stocks have trailed industrial metal prices by about 20%. This disconnect, according to J.P. Morgan strategists, is unsustainable and presents a compelling opportunity for investors.

A “V-Shaped” Recovery on the Horizon

J.P. Morgan’s research highlights a V-shaped recovery taking shape in late Q1 2025. A key driver of this rebound is China’s shift towards an expansionary economic policy. The world’s largest consumer of metals has ramped up stimulus efforts, beginning in September 2024, and further reinforced them with new fiscal measures in March 2025. This policy pivot, combined with tightening supply-demand dynamics, sets the stage for a substantial price rally in key metals.

The bank’s commodities team is particularly bullish on copper, forecasting a 15% increase in prices to $11,500 per metric ton by Q2 2026. Copper inventories remain critically low, and as demand outpaces supply, prices are expected to climb. This has significant implications for miners with strong copper exposure, positioning them as prime beneficiaries of the sector’s revival.

Mining Stocks Poised for a Comeback

One of the primary reasons J.P. Morgan sees upside potential is that mining stocks have historically lagged behind commodity prices only to eventually catch up. As investors wake up to this divergence, the sector could experience a sharp re-rating.

J.P. Morgan’s top picks within Europe include Rio Tinto, Antofagasta, Norsk Hydro, Fresnillo, and SSAB. These companies, with their strong presence in copper, aluminum, and gold, are well-positioned to capitalize on the expected surge in metal prices. Beyond commodity price momentum, J.P. Morgan forecasts a 10-20% increase in EBITDA estimates for mining companies at current market levels. Gold producers such as Fresnillo, AngloGold, and Hochschild are expected to see some of the largest gains.

Policy Clarity Could Act as a Catalyst

Despite the bullish outlook, uncertainties remain, particularly concerning trade policies. The U.S. has been weighing potential new tariffs on steel, aluminum, and copper imports, creating an overhang for the sector. However, J.P. Morgan believes that clarity on these policies, expected by early April, could serve as a catalyst for renewed investor interest.

The broader macroeconomic picture also supports a recovery. As inflationary pressures ease and global interest rates stabilize, investor sentiment is likely to shift in favor of commodity-linked equities. Historically, mining stocks have performed well in late-cycle recoveries, making the current environment particularly attractive.

The Bottom Line

J.P. Morgan’s upgrade of the mining sector signals a turning point for an industry that has been sidelined for the past two years. With China’s economic stimulus in full force, commodity prices on the rise, and mining stocks lagging well behind their fundamental value, the setup for a sector-wide rebound is compelling. Investors willing to step in now could find themselves ahead of the curve as market sentiment shifts.

JP Morgan

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