The European mining companies’ capital investments (capex) are expected to grow by 1 percent on an annual basis during 2024, writes the investment bank Bank of America (Bofa) in an analysis. The old forecast expected unchanged growth.
The adjustment is because the bank has lowered its forecast for this year’s investments and now expects a decrease of 1 percent. “Company comments suggest there may be delays in investment decisions pushing demand to the right, rather than outright cancellations,” Bofa writes.
The actual capex estimates for 2024 are unchanged, but are thus affected by the adjustment for 2023. The forecast for 2025 remains at a reduction of around 6 percent.
“However, we still believe that this will continue to weigh on order expectations for mining equipment in the coming months, with a continued focus on expansion of old facilities, with resilience in services.” The analysis also shows that Bofa reiterates its recommendations for several companies, including underperform for Swedish Sandvik and Epiroc. As for Sandvik, the bank sees short-term challenges – the company recently had a major fire at one of its factories. The investment bank also maintains its neutral recommendation for Danish FLSmidth and its buy recommendation for Finnish Metso.