--Citi cuts copper, aluminum, platinum and palladium forecasts
--Cites weaker physical demand amid macroeconomic uncertainty and rising supply
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By Francesca Freeman
LONDON--Citigroup Inc. (C) Monday cut its outlook on metals prices for this year and next amid expectations that physical demand will drop off in the months ahead amid macroeconomic uncertainty.
The bank cut its 2012 outlook on copper by 7% to $359 a pound and its 2013 forecast by 2% to $372/lb.
Citi's biggest base metal downgrade was for aluminum, for which it reduced it 2012 price outlook by 11% to $91/oz and its 2013 forecast by 12% to $96/lb.
"The demand outlook for the industrial commodity complex is expected to weaken into the third quarter of 2012 as the physical markets reflects the uncertainty currently present in financial markets," said the bank. "On the supply side, expectations are mounting for increased supply into the second half."
The bank made more severe price downgrades to the platinum group metals. Citi now sees palladium averaging $659 a troy ounce this year, down 18% on previous forecasts, and $700/oz next year, down 24%.
For platinum, the bank downgraded its 2012 forecast by 9% to $1,533/oz and its 2013 outlook by 9% to $1,565/oz.
Citi's downgrades are the latest in a long line of downward alterations to banks' forecasts on the metals sector. Last week, Barclays, RBS, Credit Suisse, and UBS cut their metals forecasts.
Write to Francesca Freeman at firstname.lastname@example.org