RBC raises 2025 forecasts for gold and alumina, cuts lithium
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The news: RBC Capital Markets expects commodity prices to be "flattish" or "marginally higher" in 2025, boosting its estimates on alumina and gold and cutting its lithium forecasts.
The numbers: RBC's largest forecast increases came from its gold equity coverage, with a 12% average rise in price targets across ASX gold stocks.
RBC expects gold prices to lift 6% to USD2,823 ($4,376) per ounce, but maintained its long-term gold price as of 2029 at USD2,200 per ounce.
It lifted its CY25 alumina prices from USD370 per tonne to USD450 per tonne to reflect bauxite sourcing challenges in China and the disruptions at the Lanjigarh and Worsley refineries. RBC also raised its long-time price to USD400 per tonne from USD325 per tonne.
However, RBC lowered its lithium price forecasts to USD913 per tonne for spodumene and USD10,700 per tonne for carbonate in CY25.
The context: RBC's key picks across its coverage are Fortescue, Sandfire Resources, Pilbara Minerals, Bellevue Gold, Westgold Resources, Regis Resources, South32 and BHP.
South32 is RBC's top pick in the diversified miners space. It continues to favour BHP over Rio Tinto in the large-cap diversified miners, given its near-term copper growth and relative outperformance in the iron ore businesses.
RBC analyst Kaan Peker said the key themes for most major economies in 2025 will be normalising inflation and monetary easing, which would be supportive of growth/commodity demand.
In the US, it is difficult to gauge when or where tariffs will land, Peker said, but he expects some pull-forward of demand into the first quarter of 2025.
Meanwhile, Peker noted that the cyclical uptick in commodity demand in China is likely to continue in the near-term, but may require further fiscal policy interventions next year.
The source: RBC Capital Markets research
