Another lockdown in China hurt copper prices this week and the worries continue to mount.
JPMorgan now sees 2022 growth at 3.0% from 3.2%. For 2023 they see 4.6% compared to 5.1% previously.
I'd still put risks to the downside on those numbers. Property-fuelled construction growth was the keystone of Chinese growth for a long time. There will be more infrastructure spending but the tide is going out on apartments/condos. Where that ends is tough to predict but the pendulum hasn't stopped swinging yet.
This week Country Garden Holdings, which for years ranked as the top developer in China in terms of sales had this to say:
“All these exert mounting pressure on all participants in the property market, which has slid rapidly into severe depression."
There's also still no light at the end of the tunnel on covid-zero policies. A lot of narratives hang on the People's Congress and what will come afterwards. That starts October 16 and may overshadow everything else on the economic calendar for the remainder of the year.
