Risks to China’s commodity demand still skewed downwards

North Korea’s rocket program appears to be at greater risk of an imminent “hard landing” than China’s economy. But beyond that, today’s Q1 GDP data tell us little about the prospects for China’s commodity demand over the rest of the year and into 2013. The key drivers will be the effect of policy stimulus, developments in the property sector, the commodity-intensity of economic activity generally, and the influence of financial factors. Taking account of all of these, we expect China’s commodity demand to disappoint, thus undermining the prices of oil and industrial metals in particular.