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China Factories Pumping Up Exports; Copper’s Divide Over Supply, Demand

By Paul Page

 

BYD electric cars readied for export at China’s Port at Suzhou in September.

PHOTO: AGENCE FRANCE-PRESSE

Paul Berger contributed to today's newsletter. 

China’s efforts to export its way out of an economic slump are triggering trade tensions around the world. Chinese manufacturers of electric vehicles, solar panels and other products are trying harder to muscle into overseas markets amid weak demand at home. The WSJ’s Stella Yifan Xie and Tom Fairless report that suppliers have flooded some countries with cheap goods, upsetting competitors and leading to regulatory moves to slow the flow of inbound volumes. The U.S. recently determined that steelmakers in China and two other countries were selling at unfairly low prices. European regulators are investigating potential subsidies for China’s low-cost electric vehicles. ABN AMRO estimates that prices of goods shipped from China have fallen around 20% this year. That’s helping reduce inflation in supply chains. JPMorgan estimates that China’s falling producer prices will lower global core goods inflation by 0.7 percentage point over the second half of 2023.

 
 

Quotable

“With a weakening economy, China naturally looks for exports. But any meaningful expansion of Chinese exports beyond current levels will crush production elsewhere.”

— Brad Setser of the Council on Foreign Relations
 
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Commodities

China ranks as the world’s largest consumer of copper. PHOTO: YIN CHAO/VCG/GETTY IMAGES

The global move toward renewable energy faces a backup at the copper mine. Demand for the metal is slumping this year, dragging down prices of the commodity and providing few incentives for miners to invest in new output. The WSJ’s Bob Henderson reports that experts are warning of a looming copper crunch when demand will outstrip supply, causing shortages and price spikes. It’s a sign of how the burgeoning renewables economy and some commodity markets are out of sync. Demand for electric vehicles and wind and solar farms is expected to drive greater need for copper over time. But copper futures have slid more than 15% in the past 10 months. The slump is being driven by weaker-than-expected economic growth in China, a slowdown in global manufacturing and a strong U.S. dollar. Miners say they are waiting for copper prices to rebound before committing to new investments.

 
 

Number of the Day

9%

Projected increase in global containership capacity next year, according to CMA CGM.

 

In Other News

A measure of U.S. consumer sentiment fell this month to a six-month low. (MarketWatch)

The United Auto Workers union is mounting organizing drives at Honda and Subaru. (WSJ)

Some of Australia’s biggest ports restarted operations today following a cyberattack that disrupted container traffic. (WSJ)

Hydrogen fuel-cell maker Plug Power warned it may fold next year without additional cash. (WSJ)

Alibaba and JD.com reported revenue growth during their recent Singles’ Day sale event but didn’t disclose figures. (South China Morning Post)

CargoNet says freight thefts across the U.S. and Canada soared 59% in the third quarter. (Supply Chain Quarterly)

Japan and South Korea are collaborating to build a hydrogen and ammonia supply chain outside their countries. (Nikkei Asia)

Container line CMA CGM’s third-quarter core earnings fell to $2 billion from $9.1 billion a year ago. (Reuters)

South Korea’s HMM is cutting costs following a 96% decline in profits (Lloyd’s List)

Bidding for a slot to get through the Panama Canal reached $4 million. (Maritime Executive)

Mexico’s president plans to require freight railroads to offer passenger service or open their tracks to government-run trains. (Associated Press)

A group of startups are looking to electrify air transport. (Bloomberg)

Canada’s Cargojet is looking to sell some of its freighters after third-quarter profit slipped. (The Loadstar)

New owners will reopen 11 Buybuy Baby stores and the retailer’s e-commerce site. (Modern Retail)

Martha Stewart says she may shift some home-goods production from China to India. (Financial Times)

Amazon postponed plans to open a 1.3 million-square-foot warehouse in Fayetteville, N.C. (Fayetteville Observer)

 

About Us

Paul Page is editor of WSJ Logistics Report. Reach him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @bylizyoung and @pdberger. Follow the WSJ Logistics Report on X at @WSJLogistics.

 
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