Are these ASX mining shares the place to invest for 2025?

This expert reckons investors should avoid the biggest miners on the ASX.

| More on:
A smiling miner wearing a high vis vest and yellow hardhat does the thumbs up in front of an open pit copper mine.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

Even though the markets are currently close to their all-time highs, many investors are still on the lookout for bargains. One expert thinks that ASX mining shares might be the best place to start.

Yes, the S&P/ASX 200 Index (ASX: XJO) has had a rough couple of weeks. But even so, the index remains less than 1% away from its all-time high. That means that finding bargain buys is a relatively difficult task right now.

Many of the ASX's most popular blue-chip shares are indeed looking relatively expensive today. These include the big four banks, Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC), which are currently at levels not seen in years (or, in CBA's case, ever).

But we are also seeing stocks like Wesfarmers Ltd (ASX: WES), Macquarie Group Ltd (ASX: MQG) and Goodman Group (ASX: GMG) at levels far higher than they were a year ago today.

In contrast, many ASX mining shares are looking unloved. For instance, BHP Group Ltd (ASX: BHP) shares are down more than 20% in 2024 to date. Rio Tinto Ltd (ASX: RIO) has gone backwards by almost 15% over the same period, while the Fortescue Ltd (ASX: FMG) share price has lost almost 40%.

But the ASX expert we're referencing today isn't recommending investors buy into iron ore miners.

Instead, it recommends that investors look to ASX mining shares in the copper and aluminium spaces.

ASX expert: Look to copper and aluminium mining shares over iron ore

As reported by the Australia Financial Review (AFR) this week, ASX broker and investment bank Goldman Sachs is warning investors that it doesn't see pressure on iron ore prices easing anytime soon.

Goldman anticipates that high supplies of the industrial metal, combined with weakening demand from China, will likely keep the iron ore price under US$100 a tonne for at least the next 12 months.

Here's some of what Goldman's head of commodity research, Daan Struyven, had to say:

The sharp rise in iron ore stocks reflects weak China demand and strong Brazil supply, which should grow further in 2025, along with Australia supply… Without a significant increase in demand, which is not our base case, an iron ore price of $US95 a tonne is needed to keep a lid on highly flexible Indian shipments and rebalance the market.

Struyven also points out that Donald Trump's re-election to the American presidency could result in steel tariffs, which could dampen global steel demand as well.

As such, Struyven recommends investors look to ASX mining shares with aluminium or copper exposure for value right now. Goldman sees the recent Chinese stimulus packages as far more supportive of aluminium and copper prices than iron ore.

The investment bank predicts that copper prices will average US$10,160 a tonne over 2025, a 13% rise from today's level. Goldman anticipates that China will "secure supply for the energy transition" and incentivize electric vehicle manufacturing and other green industries.

This is set to boost the price of copper and aluminium. The investment bank is pencilling in an average price of US$12,700 per tonne for aluminium, a 3% rise from its current levels.

Copper and aluminium on the ASX?

Goldman didn't go into specifics over which ASX copper mining shares or aluminium producers it prefers.

The ASX's most prominent pure-play copper mining shares right now include Sandfire Resources Ltd (ASX: SFR) and Aeris Resources Ltd (ASX: AIS). For aluminium exposure, investors can check out Alcoa Corporation (ASX: AAI) or perhaps diversified miner South32 Ltd (ASX: S32).

Let's see how these ASX mining shares react if Goldman is on the money with its commodity price predictions here.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Goodman Group, Macquarie Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Goodman Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

A smiling miner wearing a high vis vest and yellow hardhat does the thumbs up in front of an open pit copper mine.
Broker Notes

Why Macquarie expects this ASX All Ords copper stock to soar 48% in a year

Macquarie forecasts another big year of gains ahead for this ASX All Ords copper stock. But why?

Read more »

Female miner standing smiling in a mine.
Broker Notes

Why Macquarie predicts Pilbara Minerals shares could surge 71%

Macquarie forecasts a big rebound ahead for Pilbara Minerals shares. Let’s find out why.

Read more »

Two mining workers in orange high vis vests walk and talk at a mining site.
Resources Shares

ASX All Ords mining stock sinks on US silver acquisitions

Investors are bidding down the ASX All Ords miner on US acquisition news. But why?

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

How these 2 tailwinds could boost the BHP share price into 2026

A leading expert forecasts that BHP shares are set to recover. But why?

Read more »

a miner holds his thumb up as he holds a device in his other hand.
Resources Shares

3 reasons why the BHP share price could still be a buy

There are a few reasons why this mining giant could be appealing.

Read more »

Miner standing in front of trucks and smiling, symbolising a rising share price.
Resources Shares

The pros and cons of buying Fortescue shares in June

Let’s dig into whether it’s a good time to invest in this mining giant.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Why did the Mineral Resources share price rip 15% higher today?

The iron ore and lithium giant was the fastest riser of the ASX 200 on Thursday.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

2030 forecast: As Australia's iron ore export earnings decline, copper will rise. What does this mean for BHP shares?

BHP is expanding its iron ore and copper production.

Read more »