Improvement in base commodities complex expected, Citi says

However, the miners were still struggling to deliver economic value add (EVA) in the current environment, the bank said. The report is likely to spark worries as it is arguably one of the major drivers for their dividend yield relative to the market.

The market was suggesting miners might not be generating sufficient returns to defend current yields, the research team led by Heath R Jansen said.

"Our key indicators point to continued pressure on lower global $ growth and Chinese consumption but going forward money supply and China economic surprise indicators are pointing to a near term improvement," Jansen and his team said to clients.

That fit in well with the broker´s expectation for improvement in the base complex heading into year-end, Citi said.

"Investors have generally reduced their bearish views on the sector since August but haven’t turned positivem" it added.

The broker´s preferred exposures among the large diversified miners were Rio and Glencore, while their least preferred were Anglo and BHP.