LOS ANGELES (AP) â¿¿ Shares of major mining, base metals and steel companies were mostly trading higher on Thursday after a Barclays Capital analyst initiated coverage on the sector and said it represents a buying opportunity.

In a research note to clients, Barclays Capital analyst David Gagliano recommended the North American metals and mining sector, despite some inevitable volatility as investors sort out the outlook for global demand in the near term.

He also contends that the broader economic data that typically drive shares in the sector are more likely to turn positive over the next six to 12 months, rather than become exceptionally weaker.

The analyst also believes supply and demand for most metals are not as weak as the equity market might suggest.

In addition, Gagliano says U.S. metals and mining companies are in a significantly better position than in prior downturns to manage through periods of weak prices and demand.

Gagliano has the sector at a rating of "1-Positive," which means the stocks' fundamentals and valuations are improving.

The analyst said he sees the most value in copper, palladium and coal producers, followed by companies that produce steel and aluminum.

Gagliano expects copper and palladium prices will rebound over the next three months, while thermal and metallurgical coal prices will decline.

Beyond a three-month window, Gagliano said the pricing outlook is brightest for copper, palladium and metallurgical coal, followed by aluminum, thermal coal and steel.

Among the sector companies, Gagliano said his top picks are Freeport-McMoRan Copper & Gold Inc., Stillwater Mining Co., and Consol Energy Inc.

Shares of the metal and mining companies covered by Barclays mostly were up in afternoon trading, along with the broader market:

â¿¿ Freeport-McMoRan rose 33 cents to $40.11.

â¿¿ Stillwater added 25 cents, or 2.3 percent, to $11.12.

â¿¿ Consol gained $1.24, or 2.9 percent, to $44.25.

â¿¿ Alpha Natural Resources Inc. rose $3.18, or 13.3 percent, to $27.11.

â¿¿ Peabody Energy Corp. climbed $1.29, or 3.1 percent, to $42.62.

â¿¿ AK Steel Holding Corp. rose 32 cents, or 3.8 percent, to $8.68.

â¿¿ Century Aluminum Co. added 50 cents, or 4.5 percent, to $11.63.

â¿¿ United States Steel Corp. rose 58 cents, or 2.2 percent, to $26.55.

â¿¿ Nucor Corp. added 68 cents to $38.53.

â¿¿ Steel Dynamics Inc. increased 40 cents, or 3.2 percent, to $13.02.

â¿¿ Arch Coal Inc. rose 9 cents to $18.05.

â¿¿ Cloud Peak Energy Inc. added 69 cents, or 3 percent, to $23.59.

â¿¿ Patriot Coal Corp. fell 24 cents to $11.82.

â¿¿ Alcoa Inc. rose 17 cents to $10.87.

â¿¿ Noranda Aluminum Holding Corp. slipped 51 cents, or 4.9 percent, to $9.88.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.