Africa|Iron Ore|Mining|Platinum|Steel|Property Development|Environmental|Infrastructure
Africa|Iron Ore|Mining|Platinum|Steel|Property Development|Environmental|Infrastructure

China’s reopening should underpin commodity demand acceleration – Barclays

Iron-ore sparkle.

Iron-ore sparkle.

13th January 2023

By: Martin Creamer

Creamer Media Editor


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JOHANNESBURG ( – China’s reopening and ‘whatever it takes’ approach to the property sector are tectonic shifts that should underpin an acceleration in commodity demand through 2023, say Barclays Equity Research analysts.

2023 is set to be another strong year for miners, European metals and mining analysts Amos Fletcher, Ian Rossouw and Tom Zhang state.

This follows China’s commodity demand momentum being under downward pressure throughout 2022.

The ‘whatever it takes’ approach to the real-estate sector is seen as being central to commodity demand.

In particular, the analysts see the move to relax the ‘three red lines’ policy as well as the ‘16-point comprehensive plan’ as being supportive of recovery. It was the ‘three red lines’ policy that triggered the real-estate meltdown of the last two years.

With China now accounting for more than half of key commodity demand, the analysts see the impact on mining of a US/European recession as being lowered. The impact of Europe on key commodity demand is put at 15% and that of the US is calculated to be 8% at most.

“Our conclusion is that with China set to deliver a positive economic impulse into 2023, it should underpin powerful relative outperformance from the miners even during a western world recession,” they state.

China’s real-estate rescue plan of November, they point out, has already helped to improve homebuyer confidence, with the onshore bond market starting to reflect the improving policy backdrop. Household savings are also elevated after two years of limited consumption, implying significant pent-up demand potential.

Iron-ore, they point out, has enjoyed a powerful bounce since November amid imported iron-ore inventories at steel mills being at multi-year lows.

A plausible case is seen for the iron-ore price reaching $150/t before falling back and for iron-ore to then average a 15%-higher price of $115/t in 2023.


Analysts from Credit Suisse Equity Research Europe and UK state in a metals and mining report that they continue to prefer platinum over palladium.

With supply issues in South Africa, reduced recycling rates and improving demand in China, they expect the platinum market to turn into a material deficit into 2023.

“Our platinum forecast rise is 11% in 2023, while our palladium forecasts are unchanged,” the Credit Suisse analysts state.

Remaining intact are what they describe as the macro positives, such as future mineral demand and China’s reopening, and also enduring, they say, are micro positives that embrace capital discipline, environmental social and governance performance, and improved communication.

Regarding iron-ore, the Credit Suisse analysts also see a positive demand pull arising from China’s infrastructure stimulus as well as the Asian country’s restart of stalled property development.

These macro and micro factors, they predict, will support an iron-ore price averaging $120/t through 2023.

Edited by Creamer Media Reporter



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