China’s reopening will boost demand for raw materials
Industrial metals have ripped higher since November on bets that China’s reopening will boost demand for raw materials. A group of “base metals” led by tin, zinc and copper have surged more than 20 per cent in three months, further supported by the US Federal Reserve signalling a slowdown in the pace of interest rate rises and a softening in the US dollar, which importers use to buy commodities. Star performer tin has rocketed almost 80 per cent to $32,262 per tonne, the highest level since June, while copper prices have rallied by a tenth this month to $9,329 per tonne on brighter prospects for China’s economy following the easing of its zero-Covid policies.
Further fuelling the rally for some base metals has been a spate of supply disruptions from protests roiling copper and tin producers in Peru and production snags in Chile, to Indonesia stalling export license renewals for tin smelters ahead of a mooted tin ingot export ban. The price of tin, which is becoming increasingly strategic because of its use in solar panels and microchips, has also been pushed higher by speculative buying by China, leading to a build in inventories.