Can South32 shares keep surfing the commodities boom?

South32 Ltd (ASX: S32) shares have rushed to 52-week highs in the past month. In the past 6 months, the share price has soared by 58% to $4.62 at the time of writing.

In 2025, South32 shares experienced a rough patch that saw the mining stock fall sharply at times. The tumble was down to cyclical weakness and operational headwinds.

The recent surge and upcoming major earnings release next week have investors asking: Can South32 keep the rally going?  

Multi-trick pony

Over the last month, South32 shares have jumped, in part driven by stronger metals prices and better production results. In the past 6 months, the stock has outperformed some peers thanks to silver, copper, and aluminium strength.  

On the bullish side, the core argument for sustained upside is straightforward: South32 isn’t a one-trick pony. Unlike single-commodity miners, the miner spans nine metals, from silver and copper to manganese and aluminium. As a result, rising prices across different markets can all feed into revenues.

Stronger balance, financial flexibility

Analysts pointing to buy ratings highlight a strategic pivot away from low-growth coal toward metals that matter for electrification and the energy transition. South32’s assets, like Sierra Gorda in Chile and the Hermosa project in the US, offer leverage to copper, zinc, and battery-related materials.

A stronger balance sheet and recent divestments have also improved financial flexibility, and many brokers still see upside for South32 shares over the next year. Morgans has a buy rating on the $21 billion ASX 200 share with a 12-month price target of $5, an 8% upside.

The broker increased its price target from $4.50 after South32 released its 2Q FY26 update in January. Morgans said South32 achieved a modest beat on consensus expectations for operations, supported by strong alumina and silver output.

Silver rally

Naturally, the commodities boom is lifting fundamentals too. Recent production reports showed gains in manganese and aluminium output, and first-half results were strong enough to propel the share price to 12-month highs as markets responded.

Analysts note that silver’s rally in particular could materially boost earnings if prices remain elevated, potentially reshaping South32’s earnings mix beyond traditional aluminium exposure. 

Bumpy boom, bumpy share ride

But it isn’t all smooth sailing. The mining business is cyclical by design, and commodity price volatility can cut both ways. Past share price swings underscore how quickly sentiment can turn when prices retreat or operational hitches emerge.

Heavy capital commitments, like Hermosa’s large upfront cost, carry execution risk, and projects in jurisdictions like Chile and Mozambique expose the company to regulatory and sovereign risk.

In plain terms, South32’s diversified portfolio and surge in metals prices give it a shot at riding the commodities rally further. But cyclical risk, project execution challenges, and uneven performance history mean the ride for South32 shares might be as bumpy as the boom itself.

The post Can South32 shares keep surfing the commodities boom? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has positions in South32. 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.