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According to the China Association of Automobile Manufacturers, new energy vehicle sales dropped 22.6% month on month to 334,000 units in February - the second consecutive month of decline after subsidies were reduced by 30% in January; compared with December, sales were down 18.6% in the opening month of 2022. Nevertheless, the overall market remains positive.

Despite zero-tolerance COVID efforts, the Omicron variant is hitting many Chinese cities, including Shanghai. Some domestic travel is banned owing to the spike in cases; certain areas are enforcing stricter travel rules to slow the spread of the virus. Logistics delays and softer consumption are weakening scheduled production in the short term. Nevertheless, the temporary economic impact follows a good first two months of 2022 in which there were increases of 7.5% and 6.7% respectively in industrial production and retail sales, as well as a 21% surge in manufacturing investment.

China’s Qingshan Holding Group has come under the spotlight during the recent commodity trading index rally owing to its short position on 200,000 tons of nickel, with peak daily losses estimated at over US$ 2 billion based on the extreme prices. Qingshan indicated that it was able to fulfil its contracted deliveries.

Demand for recycled raw material is healthy from China’s domestic market but trading is cautious owing to market volatility amid the ongoing Ukraine-Russia situation.