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Investing.com -- Europe, the Middle East and Africa (EMEA) mining and steel companies head into 2026 with a clearer runway for outperformance as supply deficits, policy support and a renewed focus on strategic repositioning begin to reshape the sector, according to JPMorgan’s latest outlook.
Mining shares remain sharply discounted relative to the broader market, lagging MSCI Europe by about 45% since early 2023 despite entering a phase of meaningful forecast upgrades, the bank said in a Wednesday note.
Analysts highlight that copper and gold remain the highest-conviction themes for next year. They forecast “new highs for base metals and gold in 2026,” supported by resilient global growth, tighter supply and demand from electrification, data centers and grid investment.
Copper is projected to exceed $12,000 per tonne, driven by roughly 800,000 tonnes of supply disruptions and a deficit expected to widen through the decade. Gold is seen above $5,000 an ounce, underpinned by central-bank buying and diversification flows.
Strategic change remains a defining feature. Major producers are under pressure to simplify portfolios, unlock hidden copper value and prepare for activist scrutiny. JPMorgan cites valuation gaps between diversified miners’ break-up values and current share prices, with Rio Tinto trading at a roughly 25% discount to its sum-of-the-parts estimate.
Analysts expect the group’s new leadership to prioritise value creation in 2026.
The upcoming Anglo-Teck combination is set to create the world’s third-largest listed copper pure play by 2027, which analysts view as an “exceptional” long-term investment case.
Glencore, meanwhile, is placed on Negative Catalyst Watch ahead of its December capital markets day, with analysts warning of downside risks to 2026–27 production guidance and the possibility of higher capital spending under a shift toward greenfield copper projects.
Copper-focused names lead the bank’s preferred list. Antofagasta remains its top EMEA pick, backed by about 30% organic copper growth to 2029 and returns on capital forecast above 30% by 2028.
First Quantum is also rated Overweight, with JPMorgan arguing the stock reflects only half of its estimated value for Cobre Panama even as the government prepares an update on the mine in early 2026.
The bank is similarly constructive on gold miners. AngloGold and Fresnillo are both placed on Positive Catalyst Watch ahead of their fourth-quarter updates. Analysts project around 50% upside to fair values across the EMEA gold coverage, helped by strong cash generation and potential buyback announcements.
"JPM is structurally bullish gold and Fresnillo (OW) remains our top pick in U.K./EU gold, U.S.-listed AngloGold (OW) is top pick for investors with global reach," the note says.
In steel, JPMorgan expects a “powerful earnings recovery” as the European Commission’s 40% cut to steel imports and the activation of CBAM reshape market conditions from the second quarter.
Restocking should begin earlier in the year, with steel prices forecast to rise 10–15% by late 2026. The bank prefers carbon-steel names with leverage to the rebound, including Voestalpine, ArcelorMittal and SSAB.
Analysts also downgraded Salzgitter to Underweight, pointing to around 20% downside to its price target, earnings running below consensus and a potential overhang following a major shareholder’s intention to exit.