China’s metals and power fuel imports firm despite weak economy

Chinese imports of metals and power plant fuels held up in July, despite a softer economy and the summer lull in industrial activity, while crude oil demand flashed further signs of weakness.

Purchases of iron ore, copper, coal and natural gas were all running ahead of last year’s pace in the first seven months of 2024, according to customs data released on Wednesday. Imports of oil and agricultural goods continued to lag over the period.

Iron ore imports rose back above 100 million tons in July, despite bulging stockpiles and weak steel prices that point to a heavily oversupplied market. Steel exports, a key channel for replacing demand lost from China’s contracting real estate sector, dropped 10% from the previous month amid mounting trade frictions.

China’s unwrought copper purchases held steady from the prior month, supported by a drop in international prices. Imports of concentrate fell to their lowest in a year as the global market for ore tightened.

Crude Slump

Crude oil imports fell nearly 9% from the previous month to just over 42 million tons as refiners slowed purchases after cutting run rates to cope with poor margins. The situation is unlikely to improve in coming months as consumption stalls due to ailing consumer confidence and the property slump, while electric and gas-powered vehicles continue to chip away at traditional fuels.

Coal cargoes climbed to over 46 million tons, the highest this year, while gas imports also firmed, as utilities stocked up to meet the summer’s surge in air-conditioning demand. Healthy margins on imports could see inbound coal shipments hit a record 500 million tons this year, according to one industry forecast. 

Among farm goods, soybean imports dropped below 10 million tons for the first time in three months, while edible oils rose slightly from the previous month after a fall in prices attracted buyers.

On the Wire

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