New offensive from Beijing. Chinese planning authorities are reportedly preparing to shift into higher gear in order to put a stop to soaring energy prices amid increased pressure to meet the country's electricity demand. Beijing would like to cap the price of coal at 1,200 yuan per tonne, a ceiling that could be lowered if necessary and which should last until 1 May 2022. The aim of the move is to keep coal prices within a "reasonable" long-term price range, according to the State Planning Commission.

The effect on prices was not long in coming. The Chinese benchmark, listed on the Zhengzhou stock exchange, has plummeted nearly 50% since its annual peak of 1065 yuan. For those of you who are familiar with this column, this is the umpteenth measure taken by China to curb inflation in commodity prices. All actions are good to weigh on prices: limiting access to certain financial instruments, disposing of strategic stocks, trade restrictions, etc.

Evolution of coal prices in China, in yuan (Zhengzhou thermal coal futures) - source: Bloomberg

Putin's whistle blows. Let's stay with energy and the big price movements with natural gas. Vladimir Putin has ordered Gazprom to increase its gas deliveries to the European Union from 8 November. A long awaited measure by Europe, whose gas stocks are 70% lower than last year and which allows an easing of the British and Dutch benchmarks, as you can easily see on the graph below.

Evolution of the main natural gas futures contracts (expiring January 2022) in Europe - source: ICE

A new era of mining investment on the horizon? Years of depletion, restructuring and balance sheet repair have taken their toll on capital expenditure by the largest mining companies. However, this iron discipline (no pun intended) of capex flows could dissipate due to high base metal prices and decarbonization targets. Rio Tinto is leading the way with a not insignificant increase in its budget for 2022 and 2023.

Need for a breather. The rise in the greenback and the growing uncertainty about economic statistics in China are not good news for the base metals segment. Copper has been hit hard, falling 7% in ten days, and the same is true of zinc, lead, aluminium, tin and nickel.

However, we should try to put the strength of these declines into perspective, as they come after an acceleration in prices that began at the beginning of the month.