China posts robust commodities imports despite stuttering growth

China posted robust commodities imports in May, defying stutters in the wider economy, as buyers took advantage of weaker international prices and energy importers stocked up ahead of peak demand in the summer.

Traders may also be anticipating that Beijing will soon ramp up stimulus to revive growth. Unless demand lifts significantly, much of the extra supply, especially of industrial materials, could end up being stockpiled. That would further weigh on prices as the usual lull in factory and construction activity takes hold over the summer.

Coal imports remained elevated, and natural gas shipments rose, in what’s typically the low season for consumption due to moderate temperatures. Crude oil was another bright spot as the rebound in Chinese consumption and travel outpaces its industrial recovery.  

Copper imports are the only major commodity where imports are lagging behind last year’s pace. Weak exports of Chinese products have added more pressure to metals markets that are already contending with fragile domestic demand from the manufacturing and building sectors. 

Metals Markets

Iron ore imports increased both month-on-month and year-on-year despite a disappointing second-quarter construction season. At the same time, exports of steel products rose to their highest since 2016 as material unwanted in the home market flowed overseas. 

Copper imports had their best month since January. But they still fell year-on-year, and over the first five months are 11% lower than the same period in 2022. 

China’s imports of copper concentrate and ore hit another record as more metal is processed onshore to the detriment of refined purchases.  

Energy Products

China’s oil imports topped 50 million tons for the second time this year as new plants such as PetroChina Co.’s mega-refinery in Guangdong started commercial operations. 

Gas imports rose above 10 million tons for the first time in 2023 after prices sank to near two-year lows, while coal shipments stayed close to the levels of previous months despite a build up in inventory.

Agricultural Items  

Soybean imports hit a record after some cargoes stuck at ports due to tighter inspections finally cleared customs.

Edible oils fell from the previous month, but have still more than doubled over the year-to-date as catering and restaurant demand recovers after the pandemic.