China’s outsize commodities footprint cushions global energy shocks: Goldman Sachs

Analysts at investment bank say Beijing has become de facto ‘volatility arbiter’ for global commodity markets In a report published on Monday, commodities analysts Daan Struyven and Lia Thomas cast Beijing as the global commodity markets’ de facto “volatility arbiter”, arguing that Chinese policies pulled price volatility in opposite directions depending on whether it acted as a price-sensitive buyer or a dominant producer. “China policy tends to dampen price volatility in hydrocarbons and gold through price-sensitive import demand,” they wrote. “By contrast, it tends to amplify volatility in critical metals, where China can use supply chain dominance as leverage in its AI and geopolitical competition with the US.” That contrast had been visible in energy markets this year, the analysts said, with low Chinese crude imports one of the main reasons oil prices had not risen further despite the sharpest supply shock on record. Describing China as a “swing consumer”, the authors said Beijing had helped to stabilise markets since March by cutting net imports of seaborne crude oil and liquefied natural gas, while boosting net exports of organic chemicals and plastics.

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