An increase in demand in China, the largest consumer of commodities, could help boost global metal demand and prices amid recession concerns in advanced economies like the US and Europe. Rising demand and prices in China will also play a key role in preventing cheap imports to India and helping domestic steel prices recover. However, analysts said relaxation of covid restrictions in China could have positive results, but the benefits could be gradual. Domestic steel prices are still close to import parity prices and are under pressure. However, falling coal prices could benefit margins.
Analysts said encouraging Chinese trade data for November, expectations to relax covid restrictions and stimulus measures from Beijing led to an increase in China's copper and aluminum imports. However, lower functional capacities could have helped, as aluminum prices saw significant corrections.
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