Both copper and iron ore prices showed significant gains lately, as investors keep a close eye on China reopening developments, which are crucial to both industrial metals. China consumes about 52% of the world’s copper, making it the world's largest consumer of the brown metal. China is also the largest consumer of iron ore globally, with it importing about 80% of the iron ore it uses, mostly from Brazil and Australia. Copper, although slightly down on Friday, was still up about 5.4% this week, with a monthly gain of approximately 11.6%. At the time of writing, copper was trading at about $3.8 per pound. Iron ore has had a more pronounced upswing, with a weekly gain of about 6.1% and a monthly jump of more than 28%. At the time of writing, iron ore was trading at about CNY 724 per tonne. This was primarily due to China already eased some of its zero-COVID-19 restrictions in some areas following increasingly violent protests. China has recently been easing its rigid zero-COVID-19 restrictions, following mass protests across the country, sparked by a high-rise building fire in Urumqi, which led to the deaths of 10 people. This has led to widespread outrage, with citizens blaming ongoing restrictions for the delay in emergency services. The Chinese government has responded by loosening zero-COVID restrictions in Urumqi, as well as several districts in Guangzhou and Shanghai. Furthermore, in some localities of Beijing, COVID-19 patients with relatively mild cases of the virus have been allowed to self-isolate at home, as opposed to in the hospital, or whole buildings and localities cordoned off earlier. This has also been supported by the fact that top pandemic officials are highlighting that the Omicron strain of the virus has been losing strength, through herd immunity improving significantly, as well as more people getting vaccinated. Although cases are still quite high, they are less severe than before, with fewer deaths than in countries such as the UK and the US. This has led to widespread speculations that China may now be willing to turn away from its rigid zero-COVID policy and perhaps end mass lockdowns altogether. This is also because so far, China’s policy of introducing mass lockdowns whenever cases rise has not been working very well, leading to a delay in herd immunity as well as hitting the economy very hard. To counter these effects and revive the economy, the Chinese government has already issued a slew of stimulus measures, which are focusing heavily on the infrastructure and real estate sector, amongst others. This is going a long way in boosting copper and iron ore prices, which are heavily reliant on these sectors.
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