China reports record fossil fuel production

China's fossil fuel production surged in 2022, with coal and gas hitting record highs as environmental targets took a back seat to energy security after a turbulent year for prices. That overshadowed some good climate news from the steel sector, where China is cutting production for the second year in a row to fulfill its promise to curb emissions in the most polluting industry after electricity.

Steel production fell 2.1% in 2022 to just over 1 billion tons, although it is unclear if this decline could have happened without a slowdown in growth and a crisis in the metal-intensive real estate market. Production of aluminium, a lightweight material important for the green transition that nevertheless requires a lot of energy to produce, has surpassed 40 million tons for the first time as the industry approaches the government's capacity ceiling of 45 million tons.

Asia's fuel production profits could be another record year as Europe tightens sanctions on Russia, according to industry researcher Rystad Energy.

Rio Tinto Group, the world's largest iron ore producer, said fourth-quarter steelmaking raw material shipments rose 4% as copper output is expected to exceed expectations in the coming year.

Global markets were in a frenzy as China returned to growth stimulus policies in late 2022, and some argue it's not too late to join the rally. Chinese stocks are set to rise another 20%, oil could resume gains above $100 and copper could top $10,000 as consumption picks up.

Commodities have the strongest outlook of any asset class in 2023, with an ideal macro environment and critically low inventories of almost every key commodity, according to the head of commodity research at Goldman Sachs Group Inc.