{{tag>origination_and_operations brics emerging_countries asia china}}

====== China ======

~~NOTOC~~

{{topic>[china]}}

==== Petrochemicals ====

As it accelerates its production of plastics and synthetic fibers, China is transforming global oil demand. Between 2019 and 2024, China added approximately 44 million tons of production capacity for ethylene and propylene, the two most critical petrochemical building blocks. This is equivalent to the total capacity currently present in Europe, Japan, and South Korea combined.((https://archive.ph/gwRwq#selection-3483.88-3487.207)) ((2024))

Officially, none of this sort of thing happens. According to customs data, China hasn’t imported a drop of oil from Iran since mid 2022. Volumes that dropped steeply after US restrictions were reintroduced in 2018 supposedly petered out entirely, those records show. In reality, analyst and academic estimates and ship tracking data suggest <wrap hi>Chinese entities buy about 90% of Iran’s exports. That amounts to about 10% of China’s imports</wrap>.((https://archive.ph/K5lGp#selection-38051.0-38068.0)) ((2024))

Auch bei den Industriemetallen gibt es Rückgänge: Der Kupferpreis fiel auf den tiefsten Stand seit drei Monaten. Die Stimmung wird gedämpft durch Sorgen um China, den größten Kupferimporteur, da die jüngsten wirtschaftlichen Maßnahmen Pekings kaum Wirkung gezeigt haben. Zusätzlich lasten die Handelszölle, die unter einer zweiten Amtszeit von Donald Trump möglicherweise weiter steigen könnten, auf dem Markt.((https://archive.ph/v1WuR#selection-5631.0-5631.410))

Zu den wichtigsten Einflussgrößen auf dem Ölmarkt gehört jedoch die chinesische Konjunktur. Der Rückgang der Ölpreise am Montag ging maßgeblich auf enttäuschte Erwartungen im Hinblick auf Chinas neues Konjunkturprogramm zurück.

Beijing is also the world’s largest importer of crude oil.((https://archive.ph/8KdSG#selection-8008.0-8008.1))

Saudi-Arabien ist nach Russland der zweitgrößte Ölexporteur nach China und hält Anteile an einigen chinesischen Raffinerien.((https://archive.ph/9e2k1#selection-5661.285-5661.409)) ((2024))

Ein Vergleich mit China drängt sich auf. Die Volksrepublik verzeichnet einen Anteil von <wrap hi>76,8 % an der weltweiten Produktion von natürlichem Graphit und von über 90 % an raffiniertem Kugelgraphit</wrap>.((https://archive.ph/rkKYm#selection-5689.0-5689.195)) ((2024))

Bei <wrap hi>Seltenen Erden</wrap> produziert China <wrap hi>70 % des weltweiten Angebots</wrap>.((https://archive.ph/rkKYm#selection-5693.0-5693.130)) ((2024))

Nickel und Mangan produziert China vorrangig in anderen Ländern (z.B. Indonesien und DR Kongo), ist aber maßgeblich an der Weiterverarbeitung beteiligt.((https://archive.ph/rkKYm#selection-5693.130-5693.282)) ((2024))

China turned into a sustained net exporter of polypropylene in March. It also sells more than it buys in PVC and PET, used in clothing or food containers.

The reduction is feeding hope that the world’s No. 1 polluter may have peaked emissions years before its own deadline — thanks to output from sunlight and water.

China has more than half of the world's battery and production scrap, and leads in preprocessing and material recovery capacity. ((2023))	

The quotas usually applied for importing fuel oil into the domestic markets are used as feedstocks, while the barrels imported and saved in bonded zones for bonded bunkering do not require any allowance.

Moreover, the biggest chunk—individual home mortgages—is probably relatively safe due to the way they are structured in China. Down payments are large and loans tend to be recourse, meaning banks can go after other assets besides the house if homeowners walk away.

In September, 50 state-owned refineries covered by S&P Global, with a combined capacity of 10.66 million b/d, planned to process 9.265 million b/d of crude oil. This comprised 26 Sinopec refineries, 22 owned by PetroChina, as well as CNOOC's Huizhou Petrochemical and Sinochem's Quanzhou Petrochemical.

But run rates at Sinopec is likely to drop slightly in October, as three of its refineries, with a combined refining capacity of around 464,000 b/d, will start maintenance from early October. These include the 100,000 b/d Dongxing Petrochemical, the 100,000 b/d Qingdao Petrochemical, and the 264,000 b/d Guangzhou Petrochemical which will shut a 100,000 b/d CDU and some secondary units.

The 110,000 b/d Daqing Refining and Petrochemical has been in the middle of restarting from scheduled maintenance since Sept. 20, and plans to process about 140,000 mt of crude during the rest of the month, translating to a utilization rate of 31% in September.

The 400,000 b/d Hengli Petrochemical (Dalian) refinery has been operating at around 105% in September, slightly higher from 104% a month earlier.

The 800,000 b/d Zhejiang Petroleum & Chemical, on the other hand, operated at around 106% utilization rate at four of its CDUs, according to a refinery source, rising from 103% a month earlier.

The 320,000 b/d Shenghong Petrochemical was operating at around 100% capacity in September, largely stable from a month earlier.

But since the nation grew richer and diets shifted to more meat and dairy, the world’s second-most populous country is running out of enough arable land to keep up with the demand for high-protein food.

   * China is the <wrap hi>world’s biggest textile producer</wrap> and <wrap hi>one of the largest cotton importers</wrap>
   * China, the <wrap hi>world’s largest __crude importer__</wrap>
   * China is the <wrap hi>world’s biggest consumer of coal and the largest importer of crude oil</wrap>.

China makes as much as 95% of key solar module components, about 75% of lithium-ion battery parts, and more than half of wind turbine nacelles (the cabins that connect the blades to the tower and house the generator and gears).

China doesn’t monopolize the mining of rare earths as it once did, but it remains the leader in their processing, and similarly for copper, lithium and polysilicon. It has extensive international investments, too.

China is not only on top when it comes to wind and solar energy production but also in critical minerals mining, producing around two-thirds of the world’s lithium, 73 percent of cobalt, 70 percent of graphite and 95 percent of manganese. It also dominates microchip production, allowing it to rule many of the global supply chains associated with green energy and clean tech.((https://archive.ph/1Ew0y#selection-3791.462-3795.214)) ((2024))

===== Renewables =====

China has long dominated the renewable energy space, as the government has been investing in ramping up the country’s green energy capacity for several decades. It is already the biggest solar and wind producer, as well as the biggest lithium miner, in the world, and its expansion plans show no signs of slowing.((https://archive.ph/1Ew0y#selection-3739.0-3739.313)) 

A recent report by Global Energy Monitor (GEM) showed that China’s wind and solar power project pipeline is almost twice as big as the rest of the world combined. China currently has 180 GW of solar energy and 159 GW of wind power under construction. This puts it far ahead of any other country, including the U.S., which has 40 GW under construction. The report focused on major projects of 20 MW or higher, not accounting for the vast array of smaller projects under development. Small-scale solar farms contribute around 40 percent of China’s solar power capacity.((https://archive.ph/1Ew0y#selection-3743.0-3747.318))

===== Coal =====

The largest consumer and producer of coal, China, consumes 56 percent of its coal for electricity generation through coal-fired plants. [(:ref:fisher_investments_energy)]

===== Cotton =====

he (cotton) crop in Xinjiang, which accounts for about 90% of China’s cotton, is currently at risk from high temperatures and hailstorms, just a few months after cold weather disrupted sowing.

China may gather a smaller crop in the new season after a severe cold spell delayed sowing and hurt yields in Xinjiang, the top-producing region.

July 2023: China imported
just 490,000 tons of cotton in the first five months of the year, half the amount in the same period a year earlier.

A big driver is sluggish activity in manufacturing, particularly in China, <wrap hi>the world’s biggest consumer of metals and second-biggest user of oil</wrap>. 

To combat any further slowdown, Beijing unveiled fresh supportive measures last week, including plans to boost auto exports through cheaper financing, and is expected to drive fresh investment into the country's property sector, which has historically been a key pillar of the Chinese economy.

China Manufacturing Purchasing Managers Index (PMI) provides an early indication each month of economic activities in the Chinese manufacturing sector

 Every month questionnaires are sent to over 700 manufacturing enterprises all over China. The data presented here is compiled from the enterprises responses about their purchasing activities and supply situations. The PMI should be compared to other economic data sources when used in decision-making.
A higher than expected reading should be taken as positive/bullish for the CNY , while a lower than expected reading should be taken as negative/bearish for the CNY.

In Guangdong province, home to one of China's largest manufacturing hubs, natural gas prices are currently trading around 5,500-5,700 yuan per tonne, according to data from Refinitiv.

China’s property sector accounts for about 25% of the country’s de- mand for steel and copper and 20% of its consumption of alu- minum. 

40% of steel flow (380Mtpa = 20% of global total); 
20% of copper (2.7Mtpa = 20% of global) 
15% of aluminium (6Mtpa = 9% of global) 
15% zinc (0.7Mtpa = 5% of global)  10% nickel (0.2Mtpa = 8% of global) 

ANSWER: China property = 5-20% of global commodity supply. - so yes, Evergrande’s potentially a big deal to Commodity World.

Yep, Chinese real estate accounts for a fifth of all global and copper steel supply. 

===== Metals & Minerals =====
----
==== Bauxite ====

China, the leading importer of bauxite, was the biggest consumer of Indonesia’s bauxite until the country introduced a ban on the raw material in 2014. At the time, China was relying on Indonesia for about two-thirds of its overseas supply. Since then, Chinese smelters have heavily invested in diversifying their sources of bauxite, buying more of the raw material from other countries, including Guinea, or having built alumina refineries in Indonesia. Indonesia eventually lifted the ban in 2017.

===== Copper =====

China is an <wrap hi>important market for copper since it is the biggest buyer</wrap>. As such, in most cases, <wrap hi>weak performance of the country’s GDP translates to weaker demand</wrap>. Indeed, most analysts expect that the Chinese economy will expand by less than 5% this year.

China, the world's top importer of copper, depends on Peruvian mines like Las Bambas.

First, it offers clear evidence of slack spot demand in the physical market, particularly in top consumer China. Indeed, conditions are so weak there that smelters are planning rare large-scale exports to the LME to offload excess stock they’re struggling to sell domestically.((Bloomberg)) ((2024))

China is the <wrap hi>fourth largest copper-producing country in the world behind Chile, Peru and the Democratic Republic of Congo (DRC)</wrap>. However, China <wrap hi>plays an outsized role in copper demand, accounting for about 55 percent of global consumption</wrap>. <wrap hi>Around 30 percent of China’s copper consumption is associated with its building and construction sector</wrap>.((https://archive.ph/fhxvK#selection-3489.0-3501.87)) ((2024))

Another way in which China shapes global copper prices is through its copper smelters. The nation leads the world in refined copper production, and has increased its refining capacity in recent years, as have India and Indonesia.((https://archive.ph/fhxvK#selection-3533.0-3533.229))


==== Steel ====

Chinese steel exports to Egypt shot up by 95% in the first quarter, while those to the United Arab Emirates jumped by 81%. The latter country is now the third-biggest destination for Chinese steel after Vietnam and South Korea.((https://archive.ph/78Uhw#selection-2363.0-2370.0))

China has churned out about 1 billion tons of steel every year since 2019, but a rapid downturn in construction activity over the past year has left mills struggling. Many have switched from making construction products like reinforcement bar to hot-rolled coils that find readier buyers in other industries, as well as overseas.((https://archive.ph/78Uhw#selection-2345.0-2345.329))

East Asia is still the major market, but shipments to India, the Middle East and Latin America are on the up.((https://archive.ph/78Uhw#selection-1683.125-1683.234)) ((2024))

Steel output in China contracted in March amid ongoing weakness in the country’s <wrap hi>property sector – a key driver for demand</wrap>.((https://think.ing.com/articles/the-commodities-feed-oil-remains-in-limbo170424/#When:00:20:00Z))

As the world’s largest steel producer, China now plans to increase its share of Electric Arc Furnaces (EAFs) to 15% by 2025 in the drive toward reducing carbon emissions

Production: 1bn ton p.a.

{{topic>[china]&[steel]}}

"Since 47% of #copper is now smelted in #China, what are the plans to obtain smelted copper elsewhere should China become unfriendly? Similar question for #lithium, for which China processes 60% of the world’s supply."

Meanwhile, steel mills in the Fengnan district of Tangshan City have been officially asked by the local authorities to curb crude steel output by working on production plans throughout the year.

It ordered domestic steelmakers — who contribute more than half of global production — to keep total output from exceeding last year’s level.

But steel isn’t just any industry in China. It’s a vital employer and hefty fiscal contributor — and has been laden with political significance since Mao Zedong’s early years. There’s the temptation for some provinces in the world’s second-largest economy — with a crisis in real estate, sluggish consumption and high unemployment — to seek solace in the metal.

{{:countries:chinas_crude_supplier.png?400|}}

==== Gold ====

Swiss exports to China, which are usually a good indication of Chinese demand for the precious metal, more than doubled in January from December to 77.8 tonnes, while shipments to Hong Kong rose almost sevenfold to 44.6 tonnes, data from the Swiss Federal Administration shows.((2024))((https://archive.ph/NbOZx))

==== See also ====

{{topic>[china]}}