In the run-up to Donald Trump's inauguration on January 20, Berenberg expects increased volatility on the commodity markets, as the planned trade tariffs on US imports from China "are likely to curb the upward trend in commodity prices, especially for traditional global GDP leaders such as copper".
However, the broker added: "We believe the Chinese government can take more aggressive stimulus measures to support industrial production and the broader economy if the perceived impact of the tariffs could have an additional impact on the Chinese economy."
In terms of specific commodity prices, analysts are "cautious" on copper prices due to a stronger US dollar and global trade risks, but remain more confident on aluminum and zinc. Iron ore prices are likely to remain broadly stable, while gold prices will be supported by central bank demand, geopolitical volatility and inflation risk, the analysts said.
Platinum was highlighted as one of the main winners of the year as prices will rise due to increasing supply shortages, while demand for autocatalysts will be supported by growing hybrid vehicle sales," which should also benefit uranium, the broker added.
Rio Tinto $RIO (-1.19%)which has a "buy" rating, has a more stable investment thesis and a more attractive yield profile than BHP ("hold"), Berenberg said, while Anglo American's current share price ("sell") is pricing in a renewed takeover bid from BHP, which the broker believes "will not materialize".
