--Citi cuts copper, aluminum, platinum and palladium
forecasts
--Cites weaker physical demand amid macroeconomic uncertainty
and rising supply
(Adds further detail.)
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 francesca.freeman@dowjones.com