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Slower growth in China to drag on prices in 2022

While high power prices and low stocks will support prices in the near term, we think that prices will pull back in the second half of 2022 as Chinese economic activity slows further and supply improves. Drop-In: Neil Shearing will host an online panel of our senior economists to answer your questions and update on macro and markets this Thursday, 13th January (11:00 ET/16:00 GMT). Register for the latest on everything from Omicron to the Fed to our key calls for 2022. Registration here.
Luke Nickels Commodities Economist
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More from Metals

Metals Data Response

Global Steel Production (Apr.)

Global steel production fell in y/y terms in April, as all major producers bar India recorded declines. High energy costs and soft demand for steel are both likely to persist for much of the remainder of this year, hindering any large upticks in production. In China, producers will also be under pressure to meet state emission targets.

24 May 2022

Metals Data Response

Global Aluminium Production (Apr.)

After a weak start to the year, it looks increasingly as though a rebound in China’s output will more than offset lower production in Russia and Europe so that global production will rise a touch this year. That said, supply in the world ex China will remain constrained, even assuming higher exports from China.

20 May 2022

Industrial Metals Update

Weaker demand to enable stocks to build

Exchange stocks of base metals have fallen so far this year as high power costs have choked the supply of refined metals. Yet, we expect stocks to build as a weaker economic outlook for key metal consuming regions will weigh on demand, and easing energy prices should enable supply to recover slightly.

13 May 2022

More from Luke Nickels

Industrial Metals Update

Drawdown in stocks to reverse in 2022

Exchange stocks of base metals have fallen this year, as supply was interrupted by power rationing in China as well as the ongoing effects of COVID-19. However, now that power restrictions have been lifted, and with Chinese construction activity continuing to weaken, we expect stocks to start to build which should weigh on prices in the coming year.

21 December 2021

Metals Data Response

Global Aluminium Production (Nov.)

Despite a y/y fall in global aluminium output in November, it is still up strongly year-to-date. And it is likely to rise again from here as power restrictions in China are lifted and high prices incentivise new capacity additions. Together with a slowdown in the Chinese construction sector, we continue to expect aluminium prices to fall back by end-2022.

20 December 2021

Industrial Metals Update

Iron ore prices still set for a downturn

We doubt that the recent jump in China’s iron ore imports is indicative of increasing demand. In fact, we expect demand for iron ore in China to cool as construction activity continues to slow and the clampdown on excess steel production continues, both of which will weigh on the iron ore price.

9 December 2021
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