As Goldman backs off, Citi says chase iron ore rally to $100

Iron ore is poised to hit $100 a tonne, according to Citigroup, 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 that investors should be closing bullish bets after recent gains. “Iron ore is not a demand story, it’s a supply story,” Citigroup said.

“Iron ore is not a demand story, it’s a supply story,” Citigroup, global head of commodities research Ed Morse said in an 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 multi-year highs this year as the consequences of Vale’s 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.