As Goldman Backs Off, Citi Says Chase Iron Ore Rally to $100 – by Krystal Chia and Yvonne Man (Bloomberg News – April 8, 2019)

Iron ore’s poised to hit $100 a ton, according to Citigroup Inc., which highlighted “very, very low” seaborne cargoes just as data from China may show a pick-up in demand. That view follows advice from Goldman Sachs Group Inc. that investors should be closing bullish bets after recent gains.

“Iron ore is not a demand story, it’s a supply story,” Citigroup Inc. Global Head of Commodities Research Ed Morse said in a Bloomberg Television interview on Monday, reiterating the bank’s three-figure forecast.

In a separate note on Sunday, the bank said investors “should ‘chase’ this year’s rally, not sell into it,” referring to iron ore, as well as copper.

Global iron ore prices have powered to multiyear highs this year as the consequences of Vale SA’s fatal dam collapse in Brazil last quarter hurt production and shipments, and Australian miners BHP Group and Rio Tinto Group flagged lower output after a cyclone.

The disruptions, as well as indications that China’s demand may now be picking up, has spurred forecasts for a deficit. Still, Goldman said last week it was time close out long wagers.

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