LONDON, Jan. 9, 2020 /PRNewswire/ -- CRU has drawn on conversations between our market experts and people from all parts of commodity market value chains—from miner to end-use consumer—and we have identified three themes that will be especially important in 2020.
The three themes which will run through CRU analysis this year: China's economic rebalancing, FX currency movements, and Environmental and Social Governance.
China rebalancing and reform:
- 2020 is a critical year, marking the end of one Five Year Plan and the start of another.
- Is China on track for a gradual slowdown, or has the trade war quickened the pace of slowing?
- How fast will China rebalance its economy away from investment towards consumption; and what does that imply for commodities demand?
In the coming year, China's economy will continue to rebalance away from investment towards consumption. 2020 is a critical year for China as it marks the end of the 13th Five Year Plan (FYP) and the start of the 14th FYP. It is an obvious time to review the health of the economy.
This theme will consider the economic cycle: is China on track to deliver its 'managed' slowdown? Or will the slowdown be faster due to domestic vulnerabilities or the US-China trade war?
As well as assessing structural change: how fast will China transition towards consumption goods; and what are the implications for commodities demand?
ESG: CO2 & Paris five years on:
- External costs are being internalised by climate policy and other regulation, headlined by carbon abatement in the Paris Agreement.
- Material recycling in response to environmental concerns will influence primary commodity markets.
- Mining costs, resource development, investment decisions and capital allocation will be increasingly affected by shifts in social and governance responsibilities.
Environmental, Social and Governance (ESG) issues have risen to the top of the agenda for commodity and resource market participants and investors.
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