Chinese commodities markets entered the second half with a bearish tilt, raising expectations that next week’s big policy meet in Beijing will show how the government plans to approach problems around overcapacity and faltering demand.
The Third Plenum is typically a forum for longer-term political and economic reforms, and the general sense among observers is that major initiatives are unlikely this time around. But tweaks to the policy framework could still be consequential.
There’s a view that China is likely to provide more support for its economic recovery, but investors don’t have a clear idea of how raw materials-heavy it will be, said Paul Bloxham, HSBC Holdings’s chief economist for global commodities. “We are watching and waiting to see what gets delivered in the property, infrastructure and manufacturing sectors,” he said.