China's exports of products related to green energy saw significant growth in the first half of the year, according to a recent official statement.
The Deputy Director General of the General Administration of Customs stated that the global transition to green and low-carbon energy is advancing, with the demand for new energy construction and consumption aligning well with China's green product offerings.
In the first six months, exports of lithium batteries and wind turbine generators increased by 37.6% and 35.6%, respectively. Exports of green transportation products, including electric vehicles, railway electric locomotives, and electric motorcycles and bicycles, grew by 68.7%, 45.1%, and 31.5%.
An analyst from Galaxy Futures noted that this surge is underpinned by a concentrated spike in overseas demand and China's robust supply advantages.
On the demand side, geopolitical conflicts have driven up prices of crude oil and natural gas, subsequently increasing gasoline costs and boosting demand for electric vehicles and rail locomotives. Railway electrification projects in Belt and Road Initiative countries have also fueled demand for electric locomotives. Concurrently, expanded government support for energy storage in Europe has led to a surge in demand, driving up exports of Chinese lithium batteries and energy storage products.
On the supply side, China's green products benefit from scale, cost, and technological advantages. The country's lithium battery industry chain is comprehensive, accounting for over 60% of global power battery capacity and over 70% of lithium battery materials. China's photovoltaic industry chain commands over 80% share across all segments. Additionally, China has achieved breakthroughs in large-scale wind turbine technology at low cost. With a complete industrial chain, efficient logistics, and rapid product delivery, China has become a core global supplier of green energy and products.
Commodity Market Implications
The substantial growth in green product exports is expected to positively impact specific commodities in the domestic futures market.
An energy and chemical research expert from Guomao Futures indicated that the export growth of lithium batteries and new energy vehicles directly benefits lithium carbonate and nickel. The manufacturing of complete wind turbines and energy storage equipment requires significant amounts of cables and storage casings, which is favorable for copper and aluminum consumption. Furthermore, the expansion of wind power equipment exports can drive demand for industrial steel, though the driving force may be limited.
It is important to note, however, that relying solely on end-product exports is unlikely to sustain a prolonged unilateral price rally for these commodities. Continuous monitoring of the pace of overseas order fulfillment and changes in domestic raw material supply and demand is necessary to validate whether demand expectations materialize.
As the global energy transition enters an implementation phase, with new photovoltaic and wind power installations taking the lead, external demand has a long-term structural foundation, supporting the potential for continued high growth in green product exports.
Sectoral Divergence Expected
Nevertheless, different markets and specific segments are likely to show structural divergence.
A metals research team leader from Guoyuan Futures believes that for lithium batteries and new energy vehicles, the European Union provides the primary demand growth. Challenges in integrating green electricity in Europe have become prominent, leading several countries to introduce energy storage subsidy policies. Coupled with the allocation of special funds, these policies aim to increase annual energy storage installation growth by over 20% from 2026 to 2028 compared to 2025, indicating strong momentum for energy storage cell exports. While demand for new energy vehicles in the U.S. may weaken due to subsidy reductions, energy storage installations remain resilient, continuing to support domestic cell exports. Additionally, increased subsidies and significant room for penetration growth in emerging markets like Canada could lead to marginal sales growth for vehicles. The implementation of energy storage policies in countries like India and Australia may unlock demand growth in emerging markets.
Other new energy categories also possess export growth potential. Increased wind power subsidies in multiple countries and rising global demand for green electricity support the growth of domestic wind turbine exports. Meanwhile, demand for electric two-wheelers in Southeast Asia is growing rapidly in an unsaturated market, suggesting ample room for future growth. Overall, the high-growth trend for China's new energy product exports is expected to continue in the second half of the year.
Comments