Choose your settings
Choose your language
Commodity Trends

China’s Appetite for Commodities Is Waning

September 28, 2023
Marc-Antoine Dumont
Senior Economist

  • The situation in China has changed over the past few years and the limits to its investment and debt driven economic growth are becoming increasingly clear, which should put less upward pressure on certain commodity prices like iron ore.
  • The decision by OPEC+ to extend its voluntary production cut will push the market into deficit until the end of 2023. Combined with relatively high demand in recent quarters due to the recovery of domestic travel and the boom in China’s petrochemical industry, these extended supply cuts caused us to revise our year‑end price target for West Texas Intermediate (WTI) up to US$80 per barrel.
  • Industrial metal prices are expected to decline slightly by year‑end as the global economic environment deteriorates and China’s recovery stalls.
  • High bond yields and a strong greenback are exerting downward pressure on gold prices. But uncertainty is almost entirely negating their impact as investors seek out safe havens like gold. We therefore expect the price of gold to slip slightly over the coming months to end the year at around US$1,880 per ounce.

PDF Publication

See the full publication in PDF.