43% of Brazilian investors cut exposure to mining and wood sectors in late 2025 due to rising costs and weak steel demand
Investor confidence remains cautious as oil prices drive up production expenses while China's vertical integration threatens the cellulose industry.
A recent Itaú BBA survey reveals that Brazilian investor sentiment toward mining, metals, paper, and wood sectors is cautious. Approximately 43% of participants, representing nearly 50 investors, reduced their exposure to these segments since late 2025. The study attributes this reduction to uncertain commodity prices and unattractive valuations. Rising oil costs are cited as a primary concern alongside weak domestic steel demand and increased Chinese vertical integration in cellulose production. Investor positioning remains conservative, with 84% allocating less than 10% of portfolios to mining and metals sectors. Additionally, around 60% of respondents indicated they do not plan to increase exposure to these segments in 2027. Oil and gas distribution emerged as the preferred commodity sub-sectors among investors (47%), followed by mining (31%), paper and wood (12%), and steel production (8%). Within the mining and metals category, Vale remains the top preference (40%), while Gerdau ranks second (26%). Ternium showed notable positive momentum with investor preference rising to 12% over eight months. Conversely, Aura saw its preference drop significantly from 29% to 8%, likely reflecting profit-taking following strong recent gains.
