Amidst optimism for a Chinese demand revival, commodities face challenges as consumer prices deflate. The dip adds urgency for policy support in the major raw material market.
Faltering imports and a prolonged property market slump compound these worries, calling for economic stimulation.
China’s deflation could impact materials markets, influencing real demand in a few months. Consumer spending aversion pressures the state to boost demand, but piecemeal policies raise concerns. Commodity producers aim to avoid prolonged deflation affecting purchases.
Experts foresee targeted stimulus for gradual consumption improvement, favoring energy transition-linked materials.
UBS AG and Capital Economics Ltd. share cautious optimism for market stability through policy adjustments.