In a new report, Morgan Stanley analyst Paretosh Misra updates the firm’s outlook for metals and mining stocks. Morgan Stanley has once again significantly lowered its price target expectations for the group, but remains bullish on a pair of names at current prices.

Finding The Bottom

According to Misra, the optimism seen in the first half of the year about a late-year resurgence in metal prices has faded in recent weeks. Morgan Stanley sees three main factors continuing to weigh on metal prices: a declining cost curve, Chinese demand concerns and a strong U.S. dollar.

Misra identifies the recent weakness in China as a particular concern, as China accounts for 40-60 percent of global metal demand.

Aluminum

Chinese oversupply is…

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