Metals have seen some profit booking over the past few days. The iron ore prices are trading at a 5-month lows, while steel is trading at 1-month low.

While there are several reasons behind this, the major cues come from China because that is the movers and shakers of commodities.

The manufacturing data that came in from China has been the lowest in the past fifteen months. COVID delta cases continue to rise in China, imports as well continue to decline and that seems to be putting pressure on the prices apart from the fact that China is also trying to curb heating up in commodity prices.

In an interview to Manisha Gupta, Hongmei Li of Mysteel Global, said, "The Chinese government made it clear that they want to cut down on the steel production. So it very much depends on the investors' appetite as well as their near-term outlook. For now, there is a lot of uncertainty and so I am not surprised that the cautiousness is prevailing in the market."

Li expects demand for metals to increase from markets outside of China.

"Last year was definitely China's year. However, this year investors should look at markets outside China because, for China this is the second year and the demand momentum is vanning. Also the Chinese government would like to see that the economy is back to normal track and then it would want to do something to stabilise. But outside China, most of the countries have just come out of the pandemic impact and so they are still very much on the uptrend. So investors should look at markets outside of China."

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(Edited by : Bivekananda Biswas)