Metals Advance as China Seeks to Ease Economic Slowdown Concerns
(Bloomberg) -- Industrial metals climbed in London as investors weighed moves by Beijing to steady economic sentiment that’s been battered by concerns over energy supplies and a property slowdown.
The government is confident it can reach economic targets for the year, according to a Xinhua report that was republished across various state media. Separately, the central bank boosted short-term liquidity in the banking system, while regional authorities are set to speed up issuing bonds.
Metals and iron ore dropped last week as risk sentiment was hurt by fears over growth in China, and as coal prices -- a proxy for the energy crunch -- slumped. While coal futures extended losses again Monday, a La Nina points to more risks to fuel supplies and metals production during what may be a frigid winter.
“The market is closely monitoring whether the coal shortage is really easing,” Zhan Dapeng, metals analyst with Everbright Futures Co., said by phone from Shanghai. “Coal futures aren’t going to keep” moving by the daily limit on government intervention. In the long run, they will be determined by actual supply and demand, he said.
Investors were also mulling the implications of Beijing’s plan to expand trials for a nationwide property tax, potentially adding to President Xi Jinping’s efforts to reshape a sector that’s vital for commodities demand. Analysts including Citigroup Inc. said that proposal -- especially the five-year timelines -- signaled a cautious tack on putting a further squeeze on the crucial real estate sector.
Aluminum in London climbed 1.7%, gaining along with most major base metals. Futures in Shanghai closed 0.4% higher after earlier dropping 4.9%. Iron ore in Singapore fell 0.8%.
(All times Beijing unless otherwise indicated.)
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|Copper -0.4% in Shanghai||Crude oil +2.5% in Shanghai|
|Iron ore -0.2% in Dalian||Steel rebar -1.5% in Shanghai|
|Thermal coal -4.4% in Zhengzhou||Coking coal +3.3% in Dalian|
|Live hogs +5.3% in Dalian||Corn +2% in Dalian|
|Soybeans +1% in Dalian||Rubber -1% in Shanghai|
On The Wire
China aims to have non-fossil energy consumption exceed 80% of its total mix by 2060, when the world’s second-biggest economy plans to be carbon neutral, according to guidelines published by the official Xinhua News Agency.
The measures are part of China’s larger plan for achieving peak carbon emissions and reaching net-zero by 2060, Xinhua said on Sunday.
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The Week Ahead
Tuesday, Oct. 26
- Singapore Energy Summit, day 2
- Bloomberg China economic survey for October, 10:00
- Cnooc EGM in Hong Kong, 15:00
- EARNINGS: WH Group, Maanshan Steel, Huaneng Power, Gotion High-Tech, Chalco, Xinjiang Goldwind, Ganfeng Lithium
Wednesday, Oct. 27:
- Singapore Energy Summit, day 3
- China industrial profits for September, 09:30
- EARNINGS: HKEX, China Moly, CATL, China Coal, CGN Power, Longyuan Power
Thursday, Oct. 28:
- Singapore Energy Summit, day 4
- Fortescue quarterly production report
- Shenzhen nuclear expo, day 1
- USDA weekly crop export sales, 08:30 EST
- EARNINGS: PetroChina, Sinopec, Cnooc, China Oilfield Services, BYD, Daqin Railway, Anhui Conch Cement, LONGi Green
Friday, Oct. 29:
- Singapore Energy Summit, day 5
- China weekly iron ore port stockpiles
- Shanghai exchange weekly commodities inventory, ~15:30
- Shenzhen nuclear expo, day 2
- EARNINGS: Yangtze Power, Baosteel, Cosco Shipping, Tianqi Lithium, Zhejiang Huayou Cobalt, Angang Steel, Yanzhou Coal, Weichai Power
Saturday, Oct. 30
- Shenzhen nuclear expo, day 3
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