- Despite economic slowdown concerns, China’s demand for major commodities, driven by its clean energy sector, is growing at robust rates.
- China’s operating solar capacity has reached 228 GW, more than the rest of the world combined, indicating its dominance in global clean energy markets.
- The U.S. clean energy sector faces hurdles due to rising interest rates and remains dependent on China for raw minerals essential in EV manufacturing.
Worries about the waning strength of China’s economy have been weighing heavily on many commodity and financial sectors in the current year. Economic pundits have warned that China’s rapid growth since the global financial crisis are unlikely to be replicated in the next decade, particularly in sectors of property construction and local government investment. Indeed, China’s economic slowdown has mainly manifested in the property sector’s decline, hardly surprising considering that the industry represented 20 to 25 percent of GDP at its peak. Unfortunately, new annual housing starts are now down 57 percent, with the sector expected to remain below half of its previous size over the next decade. Wall Street investment bank Goldman Sachs has reported that China’s demand for many major commodities has actually been growing at “robust rates,” thanks in large part to its booming clean energy sector. According to GS,
China’s demand for copper is up 8% Y/Y, while demand for iron ore and oil are up by 7% and 6%, respectively, exceeding the bank’s full-year expectations. China’s green copper demand rose 71% in July from a year ago
“This strength in demand has largely been tied to a combination of strong growth from the green economy, grid and property completions. The most significant strength has come on the renewables side where related copper demand is up 130% y/y year-to-date, led by surging solar related demand,” the Goldman report has observed. China’s hegemony in global clean energy markets does not appear in any imminent danger. A June report by the Global Energy Monitor revealed that the country’s operating solar capacity has hit 228 GW, more than the rest of the world combined. China is now on track to double its wind and solar capacity a good five years ahead of its 2030 target. NN: Its back to the binary trade China demand. With a new wrincle….. Russia and Saudi supply cuts/