Industrial commodity prices in China have calmed down after Shanghai announced plans to reopen the Covid-19 blockade and the central bank has cut interest rates on long-term loans.
The monetary easing on Friday is seen specifically aimed at the affected housing market and in turn will help demand for the metal.
However, it is still difficult to say that the stimulus will help the economic recovery as Beijing is now facing the threat of a Covid-19 outbreak.
Beijing reported a new case record with a total of 99 cases recorded on Sunday which further renewed concerns over new closures being implemented in the Chinese capital.
Meanwhile, analyst Serafino Capoferri of Macquarie Group told that he does not see that China’s central bank move will provide a big boost to commodity prices until next year.
As long as the government pursues Covid’s zero policy, the raw materials market is unlikely to make much progress, especially if China’s policy continues to drive up energy prices that burden many commodity production costs.
President Xi Jinping is also expected not to change his stance on the Covid-19 zero policy until he can retain his rule for a third term in the autumn.
