China's NDRC is set to raise benchmark levels of efficiency for energy-intensive industries according to a document seen by Platts. With the NDCR indicating that capacity not meeting energy efficiency standards must be removed, ~30% of primary aluminum smelting, 30% of zinc and and 40% copper processing will need to utilize additional energy saving and decarbonization options.

The NDRC and three other departments jointly released efficiency targets in 2021; the move was seen partially as an environmental precaution, and partially as government-led, supply-side reform. With the government increasing standards in early 2022, the market is unlikely to ignore the supply/demand implications across the commodity value chain.

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Goldman's commodity strategist Jeff Currie appeared on Bloomberg in early February saying "we are out of everything, I don't care if it's oil, gas, coal, copper, aluminum, you name it we're out of it." Given demand and inventory levels, additional supply side reform from China is likely to raise medium-term expectations for metals prices. Conversely, China filled its energy supply gap in 2021 through increased demand for imports of thermal and met coal. Increased energy efficiency could help reduce the need for imports in future years.