Spotlight shifts to developed economies

The end of China’s zero-COVID policy continued to support most commodity prices this week, with many industrial metals prices extending their recent rallies. Economic activity appears to be recovering unexpectedly quickly in China and we have upgraded our outlook for China’s commodity demand this year. This view was shared by both OPEC and the IEA, who also raised their forecasts for China’s crude oil demand in the first half of the year in monthly reports released this week. However, weak US industrial production and retail sales data renewed concerns about the outlook for the US economy, limiting the price gains for many commodities. In our view, weakening activity in advanced economies is likely to weigh on prices over the next few months.