ASX lithium shares have suffered greatly over the past year or two, but now some experts think there could be opportunities within the ASX mining share sector.
The S&P/ASX 200 Index (ASX: XJO) offers many different potential investment options, including the major iron ore miners, BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), and Fortescue Ltd (ASX: FMG).
According to reporting by the Australian Financial Review, mining-focused fund managers are looking beyond the ASX iron ore shares to find the next stage of returns, so those experts are digging into other sub-sectors of the ASX materials sector.
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Experts say ASX mining shares are great value
Ben Cleary, the portfolio manager of Tribeca's Global Natural Resources fund, told the AFR:
Resources equities are just screaming value. While I think rate cuts are on the horizon, they aren't necessarily needed for the commodities equities to perform strongly in the second half, but it'll certainly help.
In terms of lithium, Janus Henderson's Global Natural Resources Fund portfolio manager, Darko Kuzmanovic, is bullish on the battery metal and has been buying shares of Mineral Resources Ltd (ASX: MIN) and Pilbara Minerals Ltd (ASX: PLS).
Janus Henderson is excited by signs that electric vehicle sales in China are increasing, according to the AFR. Kuzmanovic said:
Lithium could be a surprise into the end of 2024, as lithium equities are trading at levels that imply the whole EV transition is over.
The groundwork is set for a strong rebound in resources equities and commodity prices over the next few months into year's end.
Another expert who's bullish on lithium is Ethical Partners investment director Nathan Parkin, who had this to say:
We like the lithium sector. The underlying fundamentals are still quite strong, but there has just been lots of noise that people put a lot of weight on, but our view is that you can look through that noise.
Ethical Partners owns IGO Ltd (ASX: IGO) shares as one of its main positions. With the ASX lithium share's cash costs below spot prices. Parkin suggested IGO can keep making money even if prices drop further.
Are there any other commodities opportunities?
The copper price has reduced from its all-time high of US$11,000 per tonne earlier this year. Cleary is optimistic about copper and thinks prices will need to increase again to incentivise enough supply to meet the strong demand amid global decarbonisation.
The Tribeca resources fund has invested in Sandfire Resources Ltd (ASX: SFR) as one of the opportunities in that space.
