A more supportive monetary policy position from Beijing seems to be gathering steam "at a moment of severely depleted inventories right across the complex," which may mean industrial metals are set to be re-priced toward scarcity, said Goldman Sachs.

Its 12-month targets for aluminum and copper are $3,500 a ton and $12,000 a ton, respectively.

The bank also said the global aluminum market is likely to experience a "copper-style scarcity" this year, as energy shortages force European metal smelters to curb their operations.

Goldman Sachs estimates production losses of 340,000 tons in 1H, pushing the aluminum market into deficit. "Aluminum's projected global deficit (1.8 million tons) now just surpasses total visible global inventories, which increases the risk to a near-depletion of LME units this year as part of solving metal requirements."

TODAY'S TOP HEADLINES

China's Inflation Pressure Eased in December

BEIJING--China's factory-gate prices and consumer inflation in December both eased more than expected compared with the previous month, thanks to the plunge in oil prices, as well as Beijing's efforts to ensure commodity and food supply, which gives more room for policy easing in 2022, official data showed Wednesday.

The producer-price index rose 10.3% from a year earlier in December, down from a 12.9% increase in November, according to the National Bureau of Statistics. The result was lower than the 11.2% forecast by economists in a poll conducted by The Wall Street Journal.

Fed's Powell Says Economy No Longer Needs Aggressive Stimulus

Federal Reserve Chairman Jerome Powell called high inflation a "severe threat" to a full economic recovery and said Tuesday the central bank was preparing to raise interest rates because the economy no longer needed emergency support.

Mr. Powell said he was optimistic that supply-chain bottlenecks would ease this year to help bring down inflation as the Fed takes its foot off the gas pedal. But he told lawmakers at his Senate confirmation hearing that if inflation stayed elevated, the Fed would be ready to step on the brakes. "If we have to raise interest rates more over time, we will," he said.

Southern California Ports Struggle to Trim Cargo Backlog as Omicron Surges

The Covid-19 Omicron variant is hampering efforts to clear a backlog of about 100 container ships at the nation's busiest port complex as infections rise among Southern California dockworkers.

About 800 dockworkers-roughly 1 in 10 of the daily workforce at the ports of Los Angeles and Long Beach-were unavailable for Covid-related reasons as of Monday, according to the Pacific Maritime Association. Absentees included workers who tested positive for the virus, were quarantining or awaiting test results, or who felt unwell.

After Months of Ethics Controversy, Fed's New Trading Rules Will Be Implemented Soon, Powell Says

Federal Reserve Chairman Jerome Powell said Tuesday the central bank is close to finalizing a broad revamp of its ethics rules prompted by criticism of officials' financial transactions during the coronavirus pandemic.

Mr. Powell's comments came a day after Fed Vice Chairman Richard Clarida said he would resign this week, becoming the third central bank policy maker to step down following questions raised over personal trades.

Write to paul.larkins@dowjones.com

Expected Major Events for Wednesday

06:00/FIN: Nov Balance of Payments

07:00/NOR: Nov Monthly GDP

07:00/GER: Dec WPI

08:00/CZE: Dec CPI

08:00/SVK: Nov Employment and average monthly wage in selected branches

08:00/SVK: Nov Turnover in selected branches of economy, incl Industry & Construction

08:00/CZE: Nov Import & export price indices

10:00/LUX: Dec CPI

10:00/EU: Nov Industrial Production

11:00/IRL: Dec Monthly Unemployment

11:00/POR: Dec CPI

16:59/BEL: Nov PPI

16:59/GER: Nov Balance of Payments

All times in GMT. Powered by Kantar Media and Dow Jones.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

01-12-22 0042ET