Last week, the spot price for Iron ore in China approached $120/t, from a low of $80/t in early November. The bullish metal price trend has been driven by China’s easing of heavy-handed pandemic restrictions and policy support for its slowing economy.
This week, China’s metal prices remain high whilst Europe’s demand remains muted following a steep downward trend, showing a difference in economic fundamentals between the two regions. While global demand is falling as the recession takes its toll, China is seeing a u-turn as the government pledged to boost fiscal spending on infrastructure. While the lull in metal prices might be ending in China, they seem to continue in Europe thus creating different opportunities for metal-intensive investments, for example in the offshore wind sector.
In the week ahead, ELS Analysis will continue to monitor metal commodity flows following the rising demand in China compared to other markets.