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China’s evolving approach to Covid-19, and its implications for global growth, will remain a key risk to commodity markets in the year ahead, says Fitch Ratings.

In a new report, the rating agency said that the easing of China’s so-called “zero-Covid” policy will be an important factor for commodities markets in 2023.

“A full re-opening will provide a significant upside but recent developments suggest a gradual move away from the policy with many restrictions likely to remain well into 2023,” Fitch said.

Demand for commodities will remain soft in the year ahead as economic sentiment heading into 2023 is weak. Fitch is forecasting world GDP growth of just 1.4% next year, with output remaining flat in the U.S. and Europe.

“However, inventories remain tight across oil, gas and copper, which will support markets,” it said.

Fitch indicated that it expects the global oil market to stay tight in 2023, despite weaker demand, and that European gas prices will likely stay high throughout the year, before easing in 2024.

Additionally, it said that the global copper market will remain tight next year too, “which along with very low inventories will support prices.”