CBA On Metals Overnight Rise

"Industrial metals lifted overnight on concerns that China will limit base metal output to reduce emissions. The concerns were triggered by developments in China's steel markets, where China's Ministry of Industrial and Information Technology (MIIT) said they are seeking a mechanism to limit the country's steel output based on carbon emissions, pollutant discharges and energy consumption. The report prompted Chinese steel and iron ore futures higher. Steel accounts for ~15% of China's carbon emissions. Environmental controls on China's industrial metal output has been a growing thematic this year. Policymakers have already called out the Aluminium Corporation of China (Chinalco) earlier this year for insufficient environmental controls. Chinalco is the world's largest aluminium producer. Aluminium accounts for ~3.6% of China's carbon emissions, mostly because of the coal used to power the aluminium smelters. China's major copper smelters have also pledged to reduce copper concentrate purchases by 8.8% this year to cut down on emissions. Copper smelters are now actively looking to reduce new capacity and utilise more scrap. It's worth noting that policy intervention is driving both higher and lower metal prices. While restrictions on production to reduce emissions are helping metal prices lift, clamping down on commodity speculation is having the opposite effect."