Will 2023 be a golden year for ASX 200 mining shares?

S&P/ASX 200 Index (ASX: XJO) mining shares have been through plenty of turmoil over the last 12 months. So will 2023 turn out to be a great year?

No one can truly know what’s going to happen next. Resource prices are notoriously difficult to predict, which subsequently makes it tricky to forecast how ASX 200 mining shares are going to perform.

There are a number of different miners within the ASX 200 including the iron ore miners of BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG), and Mineral Resources Ltd (ASX: MIN).

Mineral Resources also has lithium operations. Other ASX 200 lithium shares include Pilbara Minerals Ltd (ASX: PLS), IGO Ltd (ASX: IGO), Allkem Ltd (ASX: AKE), and Sayona Mining Ltd (ASX: SYA)

Gold miners also have plenty of representation with names like Newcrest Mining Ltd (ASX: NCM), Evolution Mining Ltd (ASX: EVN), Perseus Mining Limited (ASX: PRU), and De Grey Mining Limited (ASX: DEG).

There is also exposure to commodities like copper, nickel, and other minerals within the ASX 200.

What’s the outlook for ASX 200 mining shares?

For iron ore, things are looking a lot brighter than a few months ago. As the biggest buyer of iron ore, China’s move to end COVID lockdowns may be a boost for iron demand as economic activity starts normalising.

China is enacting more initiatives to support its troubled real estate sector. A stronger construction industry could mean higher demand for steel/iron ore.

A recovery of activity in China could also mean more demand for things like copper, nickel and possibly lithium, particularly if decarbonisation investment is ramped up across the country.

Lithium miners have been through enormous volatility over the past year. Their performance in 2023 could be decided by the movement of the lithium price. A report by KPMG suggests there is enormous demand ahead for lithium if the world is to move away from the combustion engine by 2050, requiring two billion electric vehicles.

I recently covered some expert thoughts on the gold sector, which suggest the gold outlook for 2023 is improving.

Foolish takeaway

I’m not sure where the share prices of the ASX 200 mining shares will end up at the end of 2023, but I think that with the strengthening of prices for a number of commodities, it’s looking good for short-term profitability and dividends.

However, I think it’d make more sense to buy resource businesses when the outlook is weakening and sentiment is low. So, for now, I’d be happy to wait on the sidelines to give myself a better chance of capital gains.

The post Will 2023 be a golden year for ASX 200 mining shares? appeared first on The Motley Fool Australia.

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More reading

• The gold price is trading at 8-month highs. What’s next in 2023?
• What’s the outlook for ASX 200 gold shares in 2023?
• Could ASX 200 gold shares provide a safe haven for investors in 2023?
• ‘Correction is overdone’: broker upgrades Pilbara Minerals shares to buy
• If you invested $1,000 in Fortescue shares 10 years ago, here’s how much dividend income you’ve pocketed

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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