Chinese commodity exports surge in June on sluggish local demand

Chinese exports of fuel and metals in June were well ahead of where they were a year earlier, another sign of sluggish demand from the country’s industrial and property sectors.

Overseas shipments of diesel — a workhorse fuel used in factories, on construction sites and for transport — surged 180% from a year earlier, according to official data released Thursday. Copper exports jumped 187% to a record, while alumina sales were up 109% to a two-year high.

The surge in exports come after China’s growth unexpectedly came in at the slowest pace in five quarters in the three months through June. Beijing’s failure to revive its sagging economy is putting more pressure on President Xi Jinping to unveil measures to reinvigorate domestic demand as he wraps up a twice-a-decade policy-setting meeting on Friday. 

The sluggish economy also fed through into oil imports, which were down almost 11% on a year-on-year basis, and 1.1% lower from May amid seasonal maintenance at refineries and lackluster downstream consumption. Apparent oil demand in China fell 8.1% from a year earlier to around 13.7 million barrels a day in June, Bloomberg calculations show. 

Diesel exports — which will likely pressure the profits of refineries in Japan, South Korea and Taiwan — were down 23% from May. The month-on-month decline was due to a fall in export margins, Mysteel OilChem said in a note.

It was a more mixed picture in agriculture. Corn imports fell 50% from a year earlier and sugar imports were down 32%. Meanwhile, purchases of wheat and soybeans rose 44% and 11%, respectively. 

On the Wire

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