The ferrous complex rebounded on June 23, 2022:
CISA data for Mid-June came off but is still ridiculously high:
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The news that firmed the market was this:
Chinese President Xi Jinping pledged to meet economic targets for the year even as the government’s zero tolerance approach to combating Covid outbreaks and a weak housing market put the growth goal further out of reach.
In a keynote speech to a virtual BRICS Business Forum on Wednesday, Xi said China will “strengthen macro-policy adjustment and adopt more effective measures to strive to meet the social and economic development targets for 2022 and minimize the impacts of Covid-19,” according to a Xinhua report.
Of course, he can promise to report reaching the growth target. He is the God King. Whether the underlying economy actually reaches it is another question entirely.
My answer is there is very little chance of that given:
- the property starts bust will get worse for another six months yet even if sales lift now;
- lockdowns will continue unless or until something changes;
- a monumental trade shock is headed for China as the US and Europe both go into recession.
I put the probability of China suffering from a capital outflow external crisis before year-end as high as I do it reaching its growth target. Both are tail risks.
But, hey, preventing those kinds of outcomes is why Xi is lying in the first place.