China’s commodities imports stay buoyant as economy revives

Chinese commodities imports remained buoyant in September as the economy showed some signs of recovery and traders pinned their hopes on further stimulus from Beijing.

Construction and factory activity typically revives in the autumn after the summer lull, helping to narrow the decline in China’s total imports and supporting demand for industrial fuel and materials, customs data on Friday showed.

However, the latest inflation data, which saw consumer prices flatline in September and producer prices continue to fall, indicate more policy support may be needed to sustain economic growth.

Energy Products

Coal shipments dropped from the record set in August to 42.1 million tons after the weather cooled and air-conditioning needs moderated. That’s still the third-biggest monthly haul ever, as restocking for peak winter demand and pressure on domestic supply from mine safety inspections kept volumes firm amid relatively subdued international prices. 

Restocking for winter and low prices also helped keep natural gas imports above 10 million tons, while crude oil purchases slowed to 45.7 million tons as buyers ran down stockpiles amid smaller-than-expected import quotas.

Metals Markets

Iron ore imports stayed above 100 million tons for a second month. Despite the ongoing crisis in the steel-intensive property market, volumes have risen 6.7% year-on-year. 

That reflects a shift to lower grades, which requires more ore to produce the same amount of steel, stronger infrastructure spending and resilient manufacturing demand from sectors like autos, according to Capital Economics Ltd.

Imports of unwrought copper and products rose to their highest this year, supported by grid investments and renewable energy demand, while ore cargoes dropped from the record set in August.

“Renewed focus on electric vehicles and power grid extensions should revive downstream metals demand,” ANZ Group Holdings Ltd. said in a note on Friday ahead of the trade data. 

Agricultural Goods

Soybean imports fell to a seven-month low after traders said tighter customs inspections slowed cargoes. 

Meat imports also dropped as weak pork prices and sluggish demand in the domestic market curbed appetite for overseas supplies. But edible oil shipments continued to outpace last year, when Covid lockdowns hit consumption.