Fears about China’s economy have dominated headlines in recent months and have been the main factor behind the weakness in commodity prices. We have argued in previous publications that most of these concerns are grossly overdone and that China’s economic growth should begin to pick up again over the rest of this year and next. However, we also acknowledge the risk of a much sharper slowdown. In this Energy Watch, we discuss what a possible ‘hard landing’ for the Chinese economy might mean for energy commodities. In a worst case, oil could fall to $35 per barrel (for Brent), LNG to $5 per mBtu and coal to just $30 per tonne.
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