Hopes on China loosening Covid restrictions lead to metals rally
* Last week, media reports (link1, link2) suggested China could relax and possibly end its zero-Covid strategy soon, fuelling a rally in commodities. The Chinese government later issued an official statement highlighting continuation of the zero-Covid strategy right up to Mar’23.
* The news of relaxing Covid curbs led to LME commodities rallying with copper/ aluminum/lead/nickel rising 3.2%/3.6%/4.1%/7.7% WoW, respectively.
* Iron ore futures also rallied to USD84/t from the bottom of USD75/t. However, spot domestic HRC/TMT prices in China trended down on weakening demand.
* Domestic HRC price in India declined 0.4% to INR 56,100/t. However, primary TMT price strengthened 0.4% to INR56,600/t as demand for construction steel picked up.
* Most of the primary mills rolled over flat steel prices with a minor hike of INR500-750/t for TMT for Nov’22.
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