Chilean copper miner Antofagasta is the standout performer in early trade this morning, this despite it being a down day for the UK 100 index. The shares are up an impressive 4.4% today thanks to a handful of drivers including management assuaging investors by reaffirming higher Full year output guidance, even if it looks to be eyeing the lower end of the range. A 30% fall in H1 profits and 18.5% decline in revenues doesn’t sound great, but was always on the after the commodity market downturn. And it still beat consensus . The EBITDA measure of profit even registered a 2.3% climb thanks to the costs being
slashed by a whopping quarter.

Continued ramp-up of the Antucoya project which came on-line last quarter is helping along with a more prudent attitude to capital management in light of the new commodity environment and still uncertain economic outlook. Management’s view of an end to market oversupply by 2018 is also the right kind of sound to be making in order to entice bulls into any recovery story.

The shares remain in a rising trend since mid-June, recently breaking beyond a trend line of falling highs resistance at 520p which dated back to April 2015. This bodes well for 600p to be revisited even if the Copper price itself remains trapped within a narrowing trend of rising lows and falling highs going back to last year.

A bounce off support for Copper could put off or even rule out another test of rising lows around $46, making a move up to $50 the more likely outlook – especially after another breakout above falling highs resistance in July. The 20-day moving average at $48.57 is a near term hurdle for bulls.  The RSI has rising support dating back to Nov 2015, which could see a prolonged stay in bullish territory in the second half of August.

Antofagasta (ANTO) – Broker consensus: 17% Buy, 42% Hold, 41% Sell (Source: Bloomberg, 16 Aug)

Average 12-month target price: 467p, -14% (Source: Bloomberg, 16 Aug)

Mike van Dulken & Augustin Eden, 16 Aug