Jan 29, 2024 – 3.46pmFROM TEH AFR...Citi has doubled down on its...

Jan 29, 2024 – 3.46pm

FROM TEH AFR...

Citi has doubled down on its call for iron ore prices to rally to $US150 a tonne and has upgraded its copper forecasts after China pledged further support for its struggling economy and sharemarket last week.

China’s central bank announced that next month it will cut the amount of reserves that banks must maintain, injecting about $US140 billion ($212.4 billion) of liquidity into the financial system. That coincided with reports that Beijing is considering a package of measures to stabilise the nation’s slumping sharemarket“We see these measures as positive and can see this risk rally continuing over the coming month on the back of further details regarding urban village redevelopment and anticipated strong total social financing figures,” said Citi analyst, Wenyu Yao

The broker reiterated its forecast for iron ore prices to hit $US150 a tonne over the next three months, noting that any further policy easing in China could act as an “upside catalyst” for prices.

The moves sparked a rally across base metal markets, lifting copper prices to a three-week high above $US8500 a tonne. Meanwhile, iron ore futures traded in Singapore hit $US136 a tonne.