Key Takeaways:
- Citi raises long-term copper forecast to $15,000 a tonne on supply shortages
- South32 named top mining pick with target raised to 320 pence from 300 pence
- Glencore preferred among diversified miners for copper exposure over BHP and Rio
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Citi lifts copper forecast to $15,000, names South32 top mining pick
Citi raised its long-term copper price forecast to $15,000 a tonne, naming South32 as its top mining pick and Glencore as the preferred diversified copper play.
"The results validate our AI strategy," Citi's analysts said in a research note published Monday, arguing that Glencore offers better exposure to copper upside among global diversified miners. The US bank raised its long-term copper forecasts and now expects prices to reach $15,000 a tonne within the next year, versus a current LME price below $13,800.
Citi increased its target price on South32 to 320 pence from 300 pence, while lifting BHP Group to 35 pounds from 29 pounds and Rio Tinto to 81 pounds from 76 pounds. The bank maintained neutral ratings on BHP and Rio, noting that higher copper prices are partly offset by a subdued outlook for iron ore, which remains a major earnings driver for both groups. South32's Hermosa project in Arizona was highlighted as a source of long-term structural growth.
The upgrade reflects Citi's view that copper supply shortages will extend into 2027 and 2028, supporting prices above current levels. The bank expects South32 to be one of the biggest beneficiaries of commodity price upgrades over the next two years, with consensus earnings forecasts still having room to move higher as analysts incorporate stronger assumptions for copper and aluminium prices.
Citi's copper call comes as the bank grows more bullish on both copper and aluminium, where South32 also has significant exposure. Anglo American and Antofagasta are viewed by investors as the FTSE 100 miners to buy for copper exposure, though Citi's analysts see Glencore as the better pick among the large-cap diversified group. South32 continues to stand out because of its exposure to both metals, where Citi also sees upside.
The forecast implies more than 8% upside from current LME prices, with the bank betting on structural supply deficits to drive prices higher. Investors will watch upcoming production reports from South32 and Glencore for confirmation of the supply tightness thesis.
This article is for informational purposes only and does not constitute investment advice.
