China's attempts to reduce pollution will be a major driver of commodity demand in the near and long-term, and deliver a boost in demand for “green" commodities used to make electric vehicles and renewables, according to a new report from investment bank UBS.

Smoke rises above Beijing on a moderately polluted day in August 2017. Credit:AP

UBS, which is monitoring air quality records from more than 2100 locations in China, says air pollution in cities affected by the winter industrial closures is ''clearly better'' than in winter last year.

But UBS flags further action from Chinese authorities to curb pollution, if air quality deteriorates over winter.

''We expect China's action to steepen cost curves, to result in further closures, and to boost demand for "green" commodities used in renewables, EVs (electric vehicles) etc,'' the UBS report said.