China Eases Zero-Covid Rules as Economic Toll and Frustrations Mount -- Commodities Roundup

MARKET MOVEMENTS:

-- Brent crude oil rose 3.1% to $96.53 a barrel.

-- European benchmark gas slipped 8.3% to EUR104 a megawatt-hour.

-- Gold futures are up 0.5% at $1,762.30 a troy ounce.

-- Three Month copper is 2.2% higher at $8,447.50 a metric ton.

-- Wheat futures rose 1% to $8.11 a bushel.

TOP STORY:

China Eases Zero-Covid Rules as Economic Toll and Frustrations Mount

China eased pandemic controls on Friday, as the country's leaders seek to lessen the pain of a stringent zero-Covid policy that has exacted a heavy economic toll and stoked rising public resentment.

The newly appointed Politburo Standing Committee of the nation's top leaders, in one of its first major decisions, set out new rules to "optimize and adjust" the policy to minimize its impact on economic growth and people's lives, as well as further open the country's borders to foreign visitors, according to a release Friday by the National Health Commission.

Temporary bans on routes operated by airlines found to have brought passengers infected with Covid-19 into the country have been dropped, the health agency said. Travelers from other countries must now quarantine for eight days--five in a hotel or government center and three days of home health monitoring--down from a total of 10 days, it said. Passengers will also have to take only one test before boarding a flight.

OTHER STORIES:

U.N. Warns of Food-Security Risks as Global Food Imports Approach $2 Trillion

The United Nations is warning of significant risks to food security around the world, especially in poorer countries, as soaring food and fertilizer prices place further pressure on governments to secure supplies.

The U.N.'s Food and Agriculture Organization said in its latest report Friday that the global food import bill is estimated to rise to an all-time high of $1.94 trillion in 2022, up 10% from last year, pushed higher by concerns around supply from war, climate change and economic instability.

"Worryingly, many economically vulnerable countries are paying more while receiving less food," the UN FAO said in its Food Outlook report, referring to worsening conditions for importing countries.

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Biden to Announce Restrictions on Methane Emissions at COP27

President Biden is moving to tighten restrictions on emissions of methane, a potent greenhouse gas, and boost funding for developing countries to adapt to the effects of climate change and transition to cleaner technologies, according to the White House.

Mr. Biden is expected to announce the measures in a speech before a United Nations climate conference, known as COP27, according to a fact sheet released by the White House ahead of the address. The measures include plans for the Environmental Protection Agency to require oil-and-gas companies to monitor existing production facilities for methane leaks and repair them, according to administration officials.

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Price Rises Are Helping European Manufacturers Defy a Downturn

European companies have defied the continent's darkening economic prospects by raising prices, but there are signs the strategy that has protected their profits is sputtering.

Executives at some of the companies that have benefited from sharply higher prices are warning that soaring energy and food bills and concerns about jobs are beginning to deflate consumers' appetite for their products.

MARKET TALKS:

UK Mining Stocks Rise on Softening China Covid-19 Policy

1046 GMT - U.K. mining stocks rose in early morning trading, buoyed by further evidence of a softening in China's zero-Covid-19 position, AJ Bell investment director Russ Mould says in a market comment. After a meeting of the Chinese Politburo, state media said Friday that the country has eased some rules, shortening quarantine times for close contacts of coronavirus infections and international travelers entering the country. China's zero-tolerance policy and associated lockdowns has caused supply-chain disruptions, dampened commodities demand and slowed the country's economy. Anglo American is up 5.8% at 3,314.0 pence, Glencore is up 1.2% at 507.1 pence, Rio Tinto rose 4.2% to 5,363.0 pence, and Antofagasta climbed 4.1% to 1,407.5 pence. ([e-mail])

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Palm Oil Prices Gain Amid Broad Commodity Rally

1007 GMT - Palm oil prices rose as soybean oil and other commodities, such as crude oil, gained on positive sentiment following the release of softer-than-expected U.S. CPI data, a Kuala Lumpur-based trader says. Also, export data released by cargo surveyors in November shows that exports continue to grow, which indicates strong demand, he adds. The benchmark Bursa Malaysia Derivatives Exchange contract for January delivery closed MYR112 higher at MYR4,290 a ton. ([e-mail])

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Oil Surges as China Eases Covid-19 Lockdown Measures

0821 GMT - Oil prices jumped as China eased some of its strict Covid-19 rules. Brent crude oil jumped 2.6% to $96.09 a barrel. WTI also added 2.6%, rising to $88.72 a barrel. Restrictions on entering the country by air were eased including the length of the quarantine period inbound visitors must endure. Measures isolating neighborhoods with Covid-19 cases have also been eased. Chinese officials said the new measures would aim to reduce the impact of Covid-19 restrictions on economic growth. The moves will offer a big boost for commodities, whose demand has suffered because of China's harsh lockdowns. ([e-mail])

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Metals Rally on China's Relaxation of Some Covid-19 Rules

0817 GMT - Metals prices are rallying after China said it would relax some of its Covid-19 rules, leading to speculation that the country's zero-Covid policy will come to an end in 2023. Three-month copper is up 1.9% to $8,420 a metric ton, while zinc is up 4.8% to $3,019 a ton--the highest in just over a month. Gold is up 0.6% to $1,764.10 a troy ounce. "With peak Fed in the bag, thanks to a downside surprise in inflation data, pessimism at year-end around the earnings outlook could be offset by optimism on China, mainly if the country takes a less hardline stance on rising Covid cases," Stephen Innes, managing partner at SPI Asset Management, says in a note.([e-mail])

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BHP Should Be Investing as Metal Prices Fall

0012 GMT - It's time for BHP to invest in growth, Macquarie analysts reckon. "The current price dynamics, combined with BHP's assessment of megatrends, presents a great opportunity for counter-cyclical investment, in our view," the analysts say in a note. They expect the miner will target copper and nickel acquisitions, and highlight that prices for both have fallen sharply since their all-time highs earlier this year. Both commodities are now trading largely in line with Macquarie's long-term price forecasts, they add. ([e-mail]; @RhiannonHoyle)

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(END) Dow Jones Newswires

11-11-22 0714ET