Citi says commodity markets now 'fundamentally changed'

Alumina

09/03/2022 24:43

** Brokerage Citi raises its near-term commodity price
forecasts materially, says no matter how the Russia-Ukraine
crisis develops, "the world will have changed"
    ** Says the commodities such as thermal coal, oil, nickel,
aluminium and iron ore where Russia/Ukraine is a key exporter
will benefit the most
    ** Citi raises its CY22 brent forecast by 24% and says that
the ongoing crisis presents possibility of multiple oil
disruption risks
    ** Also raises benchmark thermal coal price estimates by
109% and adds that Australian coal producers are not in a
position to increase exports in any meaningful way, even though
they are fielding enquiries from consumers in EU
    ** Brokerage keeps its CY23 commodity forecasts unchanged,
suggesting a rapid reversion from current high price levels
    ** Citi upgrades Mineral Resources  MIN.AX  to "buy" from
"neutral" saying MIN has high earnings leverage to iron price
increases
    ** Brokerage downgrades Rio Tinto  RIO.AX  to "neutral" from
"buy", also updates PT for major commodity stocks
    
  Citi's estimates:  
                                           PT (A$)
 Company                  Rating      Old          New
 Alumina Ltd  AWC.AX      Neutral     2.00        2.05
 BHP Group  BHP.AX        Neutral    48.00      unchanged
 Champion Iron  CIA.AX    Buy         6.50        7.30
 Deterra Royalties        Neutral     4.60        4.65
  DRR.AX                                       
 Fortescue Metals Group   Sell       17.00        16.00
  FMG.AX                                       
 Mineral Resources        Buy        58.00      unchanged
  MIN.AX                                       
 Mount Gibson Iron        Buy         0.68        0.75
  MGX.AX                                       
 New Hope Corp  NHC.AX    Buy         2.40        2.90
 Rio Tinto Ltd  RIO.AX    Neutral    115.00      120.00
 South32 Ltd  S32.AX      Buy         5.00        5.50
 Whitehaven Coal          Buy         3.40        4.20
  WHC.AX                                       
 
 (Reporting by Himanshi Akhand in Bengaluru)
 ((Himanshi.Akhand@thomsonreuters.com;))