The mining team at Liberum Capital have singled out Asiamet Resources Ltd (LON:ARS) as its pick in a copper sector that is heading into surplus, with the price of the red metal set to slide to US$2.50 a pound by the middle of next year.
“We prefer the re-rating upside in developers over the negative earnings momentum of the expensive producers,” the broker said in a note to clients.
The dynamics of the market is such that the rest of the world is no longer eating up supplies Chinese businesses aren’t buying.
After hitting a 2019 nadir, the price should rally to around US$3 a pound, Liberum said.
Glencore a 'sell'
The broker is a ‘seller’ of Glencore (LON:GLEN), Antofagasta (LON:ANTO) and KAZ Minerals (LON:KAZ).
On Asiamet, it repeated its ‘buy’ advice and 20p a share price target (the stock closed Friday at 11.88p).
Last week in an initiation note Liberum called the AIM-listed Indonesia-focused mine developer the best kept secret in copper.
Analyst Richard Knights told investors: “Asiamet is an advanced copper exploration business with assets both near to production and globally significant in scale.”
