China’s commodities imports rise ahead of peak demand season

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.