BEIJING, June 8: China’s imports of major commodities all rose in May, even as overall imports weakened, as favourable price movements and an easing of port congestion conspired to boost inward shipments of everything from copper to soybeans.
Copper imports rose 21 percent from a nearly two-year low in April as delayed shipments from Chile arrived and buyers took advantage of higher prices at home than on the world market, China’s General Administration of Customs said on Saturday.
Soybean imports soared 28.1 percent following the easing of congestion at Brazilian ports.
Customs said crude oil imports inched up by 0.4 percent to 5.64 barrels per day (bpd) in May, with a number of refineries completing overhauls, while iron ore shipments rose 2.1 percent to reach 68.56 million tonnes, the third-highest ever.
Analysts said the May import data suggested China’s economy remained generally resilient, despite a slowdown in growth.
‘Individual market players feel it is bad because of low utilisation rates and loss of market share,’ said Graeme Train, analyst with Macquarie in Shanghai, speaking about China’s steel mills, which import two-thirds of global seaborne iron ore.
‘But when you look at the aggregate from a demand point of view, it is actually pretty impressive – massive run rates and also record levels of trader destocking in the last few months.’
However, overall trade data released on Saturday show there are still reasons to be concerned about the pace of growth in the world’s second-largest economy.
Exports in May rose by just 1 percent on the year, far lower than a Reuters poll forecast of 7.3 percent. Imports dipped 0.3 percent on the year, against a forecast of 6 percent growth.
CRUDE OIL
China, the world’s largest crude buyer after the United States, shipped in 23.95 million tonnes of crude last month, inching up 0.4 percent on a daily basis but down 6 percent from a record high 6.0 million barrels per day in May last year.
According to industry consultancy ICIS C1, crude oil and fuel oil processed by Chinese refineries, including independent refineries, rose 4.6 percent in May from April, with a number of units restarting operations after April overhauls.
Meanwhile, ChemChina, owner of China’s largest chain of standalone refineries and recipient of a crude import quota this year, also bought 4 million barrels of crude oil for delivery in May.
IRON ORE
China imported 68.56 million tonnes of iron ore in May, up 2.1 percent from April and the third highest on record, data from customs showed on Saturday, with local steel mills still running at close to record rates. Year-to-date imports reached 322 million tonnes, up 4.7 percent from a year earlier.
The increase was driven primarily by Chinese steel production, with daily runs hitting a record 2.193 million tonnes in the first 10 days of May and tailing off only slightly over the remainder of the month.
Despite weak prices and mounting losses, mills prefer to run at full speed and try to undercut their competitors in order to cling on to market share, rather than risk slashing output.
Global benchmark iron ore prices <.IO62-CNI=SI> also fell nearly 18 percent in May, encouraging many Chinese buyers to replenish their inventories, which had previously been kept deliberately low. Few expect any significant price recovery in June, with global supplies set to increase.
COPPER
China’s arrivals of anode, refined copper, alloy and semi-finished copper products reached 358,672 tonnes in May. The 295,799-tonne April volume was the lowest since June 2011.
Port strikes in Chile delayed many April term shipments of refined copper to May and June. Importers also sought to import spot refined copper in May due to improved price differentials between the domestic market and the London Metal Exchange as stocks in Shanghai’s bonded warehouses declined.
‘Arrivals of delayed shipments from Chile is one of the reasons. Price differentials were very good in May and that should be reflected in May’s imports,’ Yang Xiaoguang, an analyst at Jinrui Futures, said before the release of the data.
SOYBEANS
China imported 5.1 million tonnes of soybeans in May, up from 3.98 million tonnes in April. Port congestion has delayed shipments from Brazil, the world’s second-largest exporter, since February.
Traders and China’s commerce ministry all expect June imports to reach a record high and could even exceed 7 million tonnes. The large import volumes will hurt crushing margins, and may trigger more cancellations by crushers in China, particularly after the country’s chicken restocking was hurt by a bird flu outbreak early in the year.
Imports in the first five months fell 12.2 percent on the year to 23.43 million tonnes, customs data showed. (agencies)
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