Bullish Citigroup signals a resurgence for most raw materials after years of glut
Commodities made a comeback this year after sinking to a 25-year low in January
Singapore — Citigroup has good news for commodity bulls. It says most raw materials are expected to perform strongly next year as global economic growth picks up, oversupply dogging markets dissipates and investors plough in more funds. The bank is bullish on oil, copper, zinc, and wheat on a six to 12-month horizon on expectations of global growth of 2.7% from 2.5% in 2016. But it is bearish on coal and iron ore (describing this year’s out-performance in bulks as a fluke) and gold and soybeans. Commodities made a comeback this year after sinking to a 25-year low in January as the oil market shows signs of rebalancing after a glut and base metals rally on prospects for rising demand. Citigroup has flagged its optimism on raw materials in 2017 since at least July, and other banks have also turned more positive. Last month, Goldman Sachs recommended an overweight position for the first time in four years. "For commodities in general, the oversupply that was induced by high prices in t...
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