China’s Clean Tech Firms Signal Windfall From Gulf Energy Shock
(Bloomberg) -- Chinese clean‑tech manufacturers are beginning to benefit from the supply crunch in the Gulf, as rising oil and natural gas prices and a renewed emphasis on energy security boost demand for batteries and electric vehicles.
More than six weeks after US and Israeli strikes on Iran effectively shuttered the Strait of Hormuz, customers hoping to shield themselves from the extra costs are increasingly turning to greener solutions.
Ningbo Deye Technology Co., a major producer of energy storage systems and inverters, said last week it expects first-quarter profit to climb as much as 70% on a surge in overseas orders. Meanwhile, exports of Chinese-made electric vehicles and hybrids more than doubled in March to a record 349,000 units, as higher fuel prices renew the appetite for alternatives to gasoline-powered cars.
Deye attributed the jump in profit directly to geopolitical turmoil, with households and companies in Europe and Southeast Asia increasingly looking to battery storage. Automakers such as BYD Co. and Geely Automobile Holdings Ltd. are likewise benefiting, with industry observers noting parallels with the 1970s oil shock, when Japan gained global market share by offering fuel‑efficient cars during a period of sustained turmoil.
Chinese firms are uniquely well-positioned, given their dominance of clean energy supply chains from solar panels to batteries and EVs. Years spent building up capacity, often at the expense of profitability, have allowed them to quickly scale-up distribution at competitive prices.
But the export boom also masks continued weakness at home. Domestic EV and hybrid sales fell again in March, marking a third consecutive monthly decline.
China’s pivot to consumption-led growth has yet to materialize, leaving it overly reliant on foreign buyers. In the event of a prolonged war, the hit to the global economy could shrink overseas demand — and sharply reverse the gains made in the first weeks of the conflict.
On the Wire
US President Donald Trump’s move to blockade the Strait of Hormuz risks deepening an unfolding economic crisis for Asia’s energy-dependent economies, including America’s allies in the region and China.
China has cushions to damp the oil shock from the Iran war, according to Bloomberg Economics. But an extended conflict would present bigger threats — demand destruction in overseas markets and supply-chain snags that could hurt exports.
Cathay Pacific Airways Ltd. is cutting its passenger capacity following a surge in jet fuel costs.
Shares in Chinese rare earth companies advanced after key producers announced a sharp increase in second-quarter product prices, signaling tighter supply conditions and stronger demand amid heightened geopolitical tensions.
China has indicated it will halt exports of sulfuric acid from May, hitting metals and fertilizer industries already strained by raw material bottlenecks resulting from the Iran war.
This Week’s Diary
(All times Beijing)
Monday, April 13
- Nothing major scheduled
Tuesday, April 14
- China’s March trade balance and 1st batch of trade data, ~11:00
- Crude oil, natural gas & coal imports; oil products imports & exports
- Iron ore, copper & steel imports; steel, aluminum & rare earth exports
- Soybean, edible oil, rubber and meat imports; fertilizer exports
- EARNINGS: Hengli Petrochemical
Wednesday, April 15
- CCTD’s weekly online briefing on coal markets, 15:00
- Canton fair in Guangzhou (phase 1 through April 19)
- EARNINGS: CATL
Thursday, April 16
- China’s home prices for March, 09:30
- China’s industrial output for March, including steel & aluminum; coal, gas & power generation; and crude oil & refining, 10:00
- Retail sales, fixed assets investment, property investment, residential sales, jobless rate
- 1Q GDP
- 1Q pork output and inventory
- Retail sales, fixed assets investment, property investment, residential sales, jobless rate
- Antaike base metals conference in Hangzhou
- SHPGX natural gas conference in Beijing, day 1
Friday, April 17
- China’s weekly iron ore port stockpiles
- SHFE’s weekly commodities inventory, ~15:30
- SHPGX’s natural gas conference in Beijing, day 2
Saturday, April 18
- China’s 2nd batch of March trade data
- Grains, sugar, cotton, palm oil, pork & beef imports
- Oil products imports & exports breakdown; LNG & pipeline gas imports
- Bauxite, steel and aluminum imports; rare-earth product, alumina and copper exports
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