China’s auto exports stay robust, with NEV demand likely to recover as oil prices rise, says Fitch Ratings

China’s auto exports remained strong in early 2024, supported by competitive pricing and expanding overseas production, with new energy vehicles (NEVs) accounting for a growing share, Fitch Ratings noted. Rising oil prices are expected to bolster demand for NEVs over time by improving their total cost of ownership relative to internal combustion engine vehicles, transmitting through the fuel-cost sensitivity channel. This dynamic supports Chinese EV manufacturers and related supply chains while posing a structural demand headwind for crude oil in key Asian and European markets. The offshore yuan and Chinese equity markets, particularly EV-related stocks, are sensitive to shifts in export momentum and global commodity price trends. Traders will watch May’s China passenger vehicle export data and OPEC+ supply decisions in June for signals on near-term pricing and demand resilience.

Crude oil (WTI/Brent) reacts in real time to OPEC+ production decisions, EIA weekly inventory reports, geopolitical supply disruptions (Middle East, Russia, Venezuela) and US Strategic Petroleum Reserve announcements. A 5% intraday move on breaking news is not unusual.

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