China’s Protests Aren’t All Bad News for Commodities Markets
Oil and copper sold off after demonstrations across China, but challenges to Xi Jinping’s Covid policy could end up being positive for commodities.
Beware the China bears.
Photographer: Qilai Shen/BloombergWelcome to Elements, Bloomberg’s daily energy and commodities newsletter. In today’s take, David Fickling argues the bearishness about China’s commodities demand is probably overdone. Elsewhere, Russia’s war in Ukraine continues to upend the global energy system as Germany signs a long-term gas supply deal with Qatar. If you haven’t yet signed up to get Elements straight into your inbox you can do that here.
In a market already primed for bad news about China’s moribund Covid Zero economy, the outbreak of nationwide anti-government protests seems to confirm all the bears’ worst fears. Civil unrest rarely stokes the sorts of animal spirits needed to spark commodities demand. Brent crude futures briefly touched their lowest price since January on Monday, while LME copper fell to a three-week low before recovering.