Citi turns bullish on Glencore with six uncorrelated drivers pointing to coal price upside Proactive uses images sourced from Shutterstock
Citi has added Glencore PLC (LSE:GLEN)to its European Focus List and raised its target price to 770p, citing a bullish outlook for both coking and thermal coal underpinned by six distinct and uncorrelated demand and supply drivers.
The broker said Glencore, the world’s largest seaborne thermal and coking coal producer, is positioned to benefit from safety-related mine closures in China and substitution of Iranian steel output driving coking coal demand, alongside the end of an Indian destocking cycle.
On the thermal coal side, Citi identified a catch-up to gas price moves, the lagged impact of a super El Niño weather event on energy demand, and Indonesian supply restrictions as additional tailwinds.
Citi argued that the uncorrelated nature of these six factors makes the risk/reward profile of coal prices the most asymmetric of any major mined commodity at current spot prices.
The broker’s financial year 2026 earnings before interest, tax, depreciation and amortisation estimate sits 12% above consensus, widening to 22% above for 2027, with almost the entire divergence attributable to its more optimistic coal assumptions.
Glencore is rated ‘buy’. The shares traded sideways at 605p.