Daily Energy Report
China’s crude imports from Saudi Arabia, impact of abandoned EVs on Chinese cities, diesel demand in China, Pakistan’s fuel oil exports, and more
Chart of the Day: China’s Crude Imports from Saudi Arabia Expected to Decline
Summary
Figure (1) above shows China’s weekly crude oil imports from Saudi Arabia with the red dotted line indicating the 6-week moving average. China’s imports slightly declined in recent weeks as Saudi Aramco cut oil production and raised its Official Selling Prices (OSP).
EOA’s Main Takeaway
China’s crude oil imports from Saudi Arabia declined in July by 312,000 barrels per day (b/d) compared to June when they increased by 129,000 b/d. July’s overall imports stood at 523,000 b/d lower than their peak in March 2023.
We expect China’s crude imports from Saudi Arabia to continue declining in the coming weeks on production cuts, higher prices, and China’s use of its inventories as we discussed in our report yesterday.
Story of the Day
Reuters: China's shrewd grab for green energy recycling dominance
Summary
The column published by Reuters makes the case for why China can serve as a global leader in recycling solar panels and wind turbines. Aside from the massive amount of disposed solar panels and wind tribunes in the Asian country that enables companies to achieve economies of scale, other countries can export their obsolete solar panels and various parts of wind turbines to be recycled in China.
EOA’s Main Takeaway
The column sounds more like propaganda than a piece with substance. But the main premise is true: China wants to dominate the world’s green economy.
China is the world’s largest investor in solar and wind farms. It will end up with a massive amount of “green junk” that will only increase over the years. The US and Europe will be happy to send their “green Junk” to China, and below are two points we’d like to highlight on this issue:
We have been wondering for the last three years how the US and European countries have not considered disposal and recycling. All current efforts are insufficient and require government support.
As the US and Europe are willing to send their “green junk” to China, they will wake up one day to see that their dependence on critical materials from China has increased! They already rely on China for certain metals and materials needed for solar, wind, and battery technologies. China is trying to close the circle by controlling the recycling and disposal of these technologies.
However, we believe that if China goes that route it will have to deal with a set of challenges. Having some of the largest wind and solar farms, and the largest electric vehicle fleets in the world, means a mountain of “green junk” that needs to be dealt with before it turns into a permanent problem posing public health risks as indicated in the news below.
News of the Day
Bloomberg: China’s Abandoned, Obsolete Electric Cars Are Piling Up in Cities
Source: Bloomberg, 2023
Summary
Photos taken by Bloomberg show several fields on the outskirts of China’s city of Hangzhou glutted with abandoned electric vehicles.
“In Hangzhou, some cars have been left for so long that plants are sprouting from their trunks. Others were discarded in such a hurry that fluffy toys still sit on their dashboards,” Bloomberg wrote.
EOA’s Main Takeaway