(Bloomberg) -- China’s imports of commodities largely rose in August from the previous month as industries prepared for the peak consumption period that begins in the fall.
In China’s highly seasonal economy, processors, factories and building sites usually ramp up activity before the onset of winter, which translates into a greater requirement for raw materials. Still, the imports are arriving in an economy struggling to break free of a deflationary rut that continues to sap demand and which has filled stockpiles to the brim. That left some imports trailing when compared to the previous year.
“However, gains from July suggest demand is improving as the industry ramps up activity ahead of the northern winter,” ANZ Group Holdings Ltd. said in a note.
On a monthly basis, crude oil imports surged 16% from July to 49.1 million tons after refiners booked record volumes of cheaper Iranian oil and margins made a slight recovery. But the figure was lower compared to 2023, and shipments over the first eight months are still off last year’s pace as the sector contends with a slowing economy and the rapid adoption of electric vehicles.
Natural gas imports rose to their highest this year as China continues to prioritize security of supply for heating and power fuels. Coal shipments also remained elevated, although coking coal purchases may have been affected by the slump in the steel sector.
Iron ore imports eased from July although they stayed above 100 million tons. Port inventory is at its highest-ever for the time of year, and prices have sunk in recent weeks as China’s steel market contracts due to the ongoing crisis in the property market.
Steel exports, a key channel for soaking up China’s surplus, surged 21% from July to 9.5 million tons, despite the backlash from trade partners seeking to protect their domestic industries.
Imports of copper concentrate rose to their second-highest ever to feed new Chinese smelting capacity, despite tight global supplies. That affected purchases of copper metal, which dropped to their lowest since February.
Soybean cargoes climbed to a record 12.1 million tons after the arrival of large quantities of cheaper Brazilian shipments booked earlier in the year.
On the Wire
China plans to impose carbon-trading compliance obligations on steel, aluminum, and cement producers next year as the country extends its carbon market to compel more polluting sectors to slash emissions.
China’s exports unexpectedly picked up in August, providing a rare boost for an economy weighed down by deflationary pressures, though this has stoked tensions with trade partners.
A deepening selloff in Chinese stocks is exacerbating a crisis of confidence in the world’s second-largest economy, heaping pressure on policymakers to halt the downward spiral.
China’s Envision Energy plans to develop a $1 billion green hydrogen industrial park in Spain to help the European nation reach its greenhouse gas reduction goals.
Canola is piling up in Canada, with supplies only set to grow after China kicked off an anti-dumping investigation.
The Week’s Diary
(All times Beijing unless noted.)
Tuesday, Sept. 10:
- China’s 1st batch of August trade data, including steel, iron ore & copper imports; steel, aluminum & rare earth exports; oil, gas & coal imports; oil products imports & exports; soybean, edible oil, rubber and meat & offal imports ~11:00
- Meeting of China’s National People’s Congress standing committee in Beijing
Wednesday, Sept. 11:
- CCTD’s weekly online briefing on Chinese coal, 15:00
- Summit on China’s Belt and Road initiative in Hong Kong
- Meeting of China’s National People’s Congress standing committee in Beijing
Thursday, Sept. 12:
- China’s monthly CASDE crop supply-demand report
- Summit on China’s Belt and Road initiative in Hong Kong
- Meeting of China’s National People’s Congress standing committee in Beijing
Friday, Sept. 13:
- China weekly iron ore port stockpiles
- Shanghai exchange weekly commodities inventory, ~15:00
- Meeting of China’s National People’s Congress standing committee in Beijing
Saturday, Sept. 14
- China new home prices for August, 09:30
- China industrial output for August, including steel & aluminum; coal, gas & power generation; and crude oil & refining. 10:00
- Retail sales, fixed assets investment, property investment, residential sales, jobless rate
--With assistance from Kathy Chen, Winnie Zhu, Sarah Chen, Hallie Gu and Rob Verdonck.
(Updates with ANZ comment in third paragraph)
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