BofA-Australia Metals Mining and Steel Increase in coal, iron ore and US steel price forecasts...-20251124

Raise coal, iron ore and US steel price forecasts

Our strategists update price forecasts (see their Year Ahead 2026). We turn more positiveon most commodities and increase price forecasts across metals. Iron ore: We raise ourprice forecast by US$7.0/t (8.0%) to US$97.0/t in 2026 and by US$14/t (18%) toUS$94/t in 2027. We increase met/thermal coal price forecasts by 9%/8% on averageover 2026-2027. US steel prices: We lift US HRC prices by an average of 6% during2026-2029. There is no change in mineral sands or rare earths prices. We make norecommendation changes. Full earnings, PO & commodity price changes on pp. 2-4.

Key equity view, earnings and PO changes

BlueScope Steel (Underperform): Higher earnings from North Star due to higher USsteel prices are partially offset by lower earnings from Australia as we raise raw materialcosts (iron ore and coal). We lift PO by 3.7% from A$22.50 to A$23.30. As discussed inour AGM trading update report, we are yet to see green shoots in BSL’s steel business inAPAC and we believe it is unattractive to invest now. Reiterate Underperform.