China’s crack down on pollution is a major driver for commodities
As detailed in our note, we expect China’s focus on reducing air, land, and water pollution to be a major driver for commodities, and in turn mining stocks, both near and long-term. UBS Evidence Lab uses multiple sources to provide unique visibility into air quality levels across China over the last 12 months, including the 2+26 cities impacted by the winter closures. We expect China to take further action if air quality deteriorates over the winter, and to take steps medium-term to further improve air quality. We expect China’s action to steepen cost curves, to result in further closures, and to boost demand for “green” commodities used in renewables, EVs etc.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
