Citi’s global commodities research team led by Max Layton believes that “opportunities abound” in the resource complex and has a list of 15 related trade and investment ideas. Mr. Layton does not expect a runaway bull market but sees commodities supported by investor demand , supply concerns for oil and copper, low inventories in many subsectors and stronger-than-expected demand for some materials.
Citi analysts recommend that oil producers lock in current 2025 prices through the futures markets as the strategist believes Brent crude prices will fall to US$60 next year as non-OPEC supply rises. Mr. Layton also believes copper prices will rise from the current levels of just under US$9,000 per tonne to US$12,000 in the next two years.
Mr. Layton recommends buying iron ore producers when the commodity price gets below US$90 per tonne as he sees upside to potentially US$120 per tonne. The team expects nickel prices to continue to weaken as Indonesian supply creates a surplus. Like nickel, Citi expects lithium prices to drop – by 33 per cent – as the result of a large global surplus that may result in mine closures.