Copper, oil and iron ore led global commodity markets lower on Monday, after China’s economic growth target was less than expected, fuelling fears of an uneven recovery in the world’s largest consumer of raw materials.
On Sunday, outgoing premier Li Keqiang announced an economic growth target of “around 5 per cent”, compared to last year’s official goal of 5.5 per cent.
“Everyone’s disappointed by the China [GDP] number,” said Al Munro, senior base metals strategist at Marex, a brokerage. “We’re in a very choppy, uncertain environment”.
As the world’s biggest commodities consumer, China is a crucial driver of prices for raw materials ranging from zinc to copper and crude oil to corn.
In Dalian on Monday, the benchmark future contract for iron ore, a key ingredient in steelmaking, fell more than 2 per cent to Rmb897 ($130) per metric tonne.
The benchmark copper future contract fell nearly 1.5 per cent on the London Metal Exchange on Monday morning, although copper prices started to recover in the afternoon.

Meanwhile Brent crude futures were down around 1 per cent on Monday, reflecting investor concerns around Chinese growth and caution ahead of testimony on Tuesday and Wednesday from US Federal Reserve chair Jay Powell.
Other official forecasts from the weekend also weighed on market sentiment. Beijing’s projected rise in fiscal expenditure of just 5.5 per cent this year is lower than the pre-pandemic norm and would mark the lowest ratio of spending to gross domestic product in 11 years.
“The budget doesn’t deliver a significant amount of new fiscal stimulus, and largely opts for maintaining the status quo,” said Wei He, China economist at Gavekal Dragonomics in Beijing. “That fiscal restraint will put a ceiling on infrastructure investment growth.”
Wei estimated that infrastructure investment will probably grow by a “more modest 5 per cent or so in 2023” after notching an 11.5 per cent jump in 2022.
The lower-than-expected growth target comes on the heels of official data that showed China’s manufacturing sector expanded last month at its fastest pace since April 2012, which had stoked hopes that the country’s economic recovery might gather pace after a muted showing at the outset of 2023.
“Most people are disappointed with the recovery story so far,” said Darin Friedrichs, a commodity analyst at Shanghai-based Sitonia Consulting. “Things are definitely improving on last year, but the new growth target confirms to a lot of people that we’re not going to come roaring back as had been hoped for.”
Prices for industrial metals including tin, zinc and copper had climbed in recent months on bets that China’s post-Covid economic reopening would boost demand for raw materials. However, market hopes for a strong rebound in activity in the country are slowly “giving way to concern over falling cargo shipments, rising base metals inventories and lacklustre sales of homes and cars”, analysts at JPMorgan wrote last week.