Posted on 15 May 2025
The de-escalation of the trade war between the US and China provides an “improved environment” for Canadian-listed miners, according to analysts at Scotia Capital.
Last week, Washington and Beijing agreed to temporarily slash the so-called reciprocal tariffs, meaning that goods imported into both countries will be subject to a baseline 10% tariff rate. Other specific import duties apply to different products.
While the macroeconomic backdrop remains “uncertain,” the US-China deal offers “hope that cooler heads can prevail and that a self-inflicted global economic Armageddon can still be avoided,” says analyst Orest Wowkodaw.
Most Canadian miners reported in-line or better-than-anticipated Q1 results with reaffirmed 2025 guidance. Excluding First Quantum Minerals, producer balance sheets are “very well positioned to navigate the current uncertainty,” the analysts say.
Still, Capstone Copper and Freeport-McMoran expect tariffs to inflate US mining operations costs by 5%, while Capstone and Hudbay Minerals have delayed near-term greenfield growth projects by six to 12 months due to uncertainty, Kallanish notes.
“Due to heightened uncertainty, we continue to prefer exposure to larger miners with high-quality assets and strong balance sheets with attractive valuations, such as Cameco Corp, Ivanhoe Mines, and Teck Resources,” Wowkodaw comments. “Higher-risk mid-cap miners Champion Iron, Capstone Copper, Ero Copper, Hudbay Minerals, Lundin Mining, and MAC Copper (Capstone Copper is our favourite) also offer a relatively attractive risk/reward profile, as valuations remain discounted.”
Source:Kallanish
