Citi downgrades Rio Tinto on rising China concerns

As for Friday's closing price of 5,785p, the stock had risen by around 27% since last August, but its deep discount to the wider sector has "now eroded", Citi said.

"We still have China macro concerns. We are unlikely to see any meaningful support for steel demand from recently announced property easing; all property indicators are still in deep contraction," the bank said.

"While the recent Politburo meeting pledged to support the property sector through supply and inventory management (to stabilise house prices and sales), Citi thinks this is unlikely to stimulate incremental steel demand."

Citi added that China steel mills are now loss-making again and we are entering into a period of seasonal weakness for mining equities.

The bank has left its 6,000p target price unchanged, which suggests very little upside to the stock, which was up 0.3% at 5,801p by 0935 BST.