Citi Analysts Bullish on Base Metals and Iron Ore Prices

Citi analysts presented a bullish, near-term view for base metals and iron ore prices, citing optimism over more stimulus measures from top consumer China, although the longer-term view was less positive.

Citi raised its three-month price targets for copper, aluminum, nickel, zinc, lead, tin, and iron ore, leaving long-term targets unchanged.

> “We see temporary near-term upside for base metals and iron ore in the coming weeks on China policy momentum before seeing this fade in our base case as U.S. election and recession risks and a physical market reaction to higher prices come to the fore,” Citi analysts wrote in a recent note.

The forecast hinges on China's implementation of stimulus, U.S. interest rates, and the 2024 election outcome.

The brokerage is particularly bullish on iron ore, forecasting a three-month price target of $120 per ton, up from $85 per ton, due to its strong ties to Chinese stimulus, as China is the world’s largest importer of iron ore.

Copper is also set to benefit from similar trends, with Citi raising its three-month price target to $10,500 per ton from $9,500 per ton.

However, the brokerage cautioned about a more uncertain long-term outlook due to U.S. interest rate uncertainties and the potential for recession.

The U.S. election is another uncertainty, especially if Donald Trump wins, which could impact base metal prices given his anti-China stance.