Despite improved valuation metrics, risk appetite for major miners such as BHP Group (ASX:BHP), Rio Tinto (ASX:RIO), and Fortescue Metals (ASX:FMG) remains subdued, with the stocks still not reaching "conviction buy" territory, according to a Thursday report from The Australian, citing investment and financial services firm Citi.

While valuations have improved, with a sector median price-to-valuation ratio of 0.9, Citi analyst Paul McTaggart cautioned that it's "too early to re-enter" given persistent macroeconomic headwinds, the report said.

McTaggart pointed to weak global manufacturing data and subdued metals demand, particularly as China's GDP growth is forecast to slow to 4.2% in 2025.

Despite a falling exchange rate, McTaggart noted that a weaker dollar does not necessarily benefit Australian miners, as it correlates with commodity price expectations.

Though appetite for the miners remains low, with earnings momentum turning slightly positive, they are not yet in the "conviction buy" territory as lower commodity prices raised risks for fiscal 2025 earnings.

"We are remaining cautious on the mining sector for now as the macro backdrop challenges demand and price recovery, " McTaggart said, in the report.

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