Metal Mining
4Q25 preview: Less Volume, But Better Margins
- 4Q25E earnings are driven by ASP appreciation and margin expansion, despite muted volume growth across companies in the sector.
- We expect ANTM and MBMA to lead earnings performance, supported by cost efficiency and HGNM production normalization.
- We upgraded the sector to Overweight with a revised pecking order of ANTM > NCKL > TINS > INCO.
4Q25 preview: Less volume, better margin
Entering 4Q25E, we expect an improvement in the metal mining sector’s earnings, primarily driven by ASP appreciation and margin expansion rather than aggressive volume growth. Higher ASPs across nickel-based commodities (+0.1-1.1% qoq), including a ~0.5% qoq uplift in saprolite nickel ore (~1.6% grade), support margin expansion. As a result, sector GPM and NPM are projected to expand to approximately ~17% and 10.1% in 4Q25F, alongside sector revenue growth of ~9% qoq, supported by ANTM (+59% qoq) and MBMA (+152% qoq) following HGNM production normalization after halting in 3Q25.
4Q25 earnings potential outperformers: MBMA, ANTM
Based on recent operational releases, our focus remains on MBMA, which is showing a meaningful operational recovery, particularly from the restart of its HGNM segment. This is supported by ASP growth of around +5% y-y alongside a -9% y-y decline in cash costs, driving margin improvement. We also estimate ANTM’s earnings to remain robust, reaching +109% of our estimate and +110% of consensus estimates, supported by a solid contribution from the nickel segment despite softer gold sales volume in 4Q25F.
Earnings growth play on FY26F
Entering FY26F, government policy particularly the planned 34% yoy cut in nickel production to ~250 mn wmt is set to become a key catalyst for nickel-based metal stocks. In our previous report on INCO, we highlighted a potential structural shift in the global nickel market from a surplus of ~107 kt to a deficit of ~705 kt. We expect RKAB approvals to be prioritized toward SOEs (ANTM) and integrated players (NCKL). Consequently, FY26F earnings growth is projected to outpace revenue growth (see Exh. 1), favoring stocks with strong feedstock visibility and operating leverage, where earnings delivery and estimate upgrades should drive returns.
Upgrade sector to Overweight with top pick of ANTM/NCKL
We upgraded the sector to Overweight and Tactical (3M): OW, supported by improving margin dynamics in 4Q25F and stronger earnings visibility into FY26F amid a more disciplined nickel supply outlook. Our updated pecking order is ANTM > NCKL > TINS > INCO. ANTM and NCKL remain our top picks given sustained ore pricing, integrated operations, and high earnings sensitivity to ASP upside. MBMA continues to benefit from the normalization of HGNM operations, while TINS is upgraded on improving feedstock quality and favorable tin price momentum. INCO remains more tactically positioned amid feedstock and earnings volatility.
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