Deutsche Bank downgrades Antofagasta to 'sell'

While the analysts said they remained "constructive" on the outlook for copper, they highlighted the Antofagasta shares had been "very strong" year-to-date, up 25% compared to the 5-10% for peers and 5% for copper prices, with no "obvious" underlying operational drivers.

DB expects Antofagasta to maintain its premium valuation driven by its long-life asset base, established track record and strong balance sheet. However, it stated cash flows would remain "constrained" with "a material step" up in capex expected in from the second half.

The analysts also anticipate that costs will increase in the second half as tailwinds in the first and political uncertainties in Chile will keep capex "structurally elevated" for the next five years.

"Valuation, at over 8x enterprise value/underlying earnings, has moved to the top end of its range, a warning signal historically," said Deutsche Bank.

Despite the downgrade, DB did up its target price on the firm from 870.0p to 920.0p.