Credit Suisse Analyzes Mining and Metals Issues Going In To Q2


Credit Suisse named Teck Resources (TCK-B.TO) and Goldcorp (G.TO) among its favoured large cap mining and metals issues going in to the second quarter.

Teck is up around 40 cents while Goldcorp is down the same amount today.

Time for RISK-ON: "With 1Q11's ruggedness behind us, the next leg of the global commodity re-stock momentum is upon us: the Middle East is to see stimulatory inflows; Japan is in recovery; China's PMIs troughed in February. The final icing on the cake will be the week Chinese food prices peak.

"Structurally, our favourite Asian demand "shorts" (copper, bulks; palladium) continue to await a supply onslaught that refuses to arrive, more than likely delayed until 2014/15. This results in prices that refuse to peak. We reject fears that rising interest rate & USD regimes are BAD for commodities."

Key 2Q11 Price Changes: "Iron Ore (>$130/t to 2014), Coking Coal (+30%), Silver, Zircon, and Ilmenite receive our most meaningful upgrades in 2Q11, due to confirmation of increasingly tight conditions impacting those markets. Meanwhile we have tweaked our Lead, Zinc and Alumina prices lower.

Global Energy Shortages: "While the world revisits the debate on the safest, cleanest, most-cost-effective and secure energy mix, we have consciously chosen not to amend our Uranium or thermal coal price forecasts. We remain bullish on the outlook for energy, given the intensifying shortages."

Favoured Large Caps include Rio Tinto ( RIO ); Xstrata (XTA.L); Freeport ( FCX ); Peabody ( BTU ); Teck (TCK-B.TO); Goldcorp (G.TO); Vale ( VALE ) and Newcrest Mining (NEM

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: BTU , FCX , RIO , VALE

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