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Reuters

If you tried to distil the mainland's commodity imports for last month into a single word, that word may be cautious.
Crude oil imports rose 6 per cent from July, but the mainland was a net fuel exporter for a fourth month this year, meaning some of the additional crude imports were shipped out as refined products.
In assessing mainland oil demand, the impact of the trade in refined products is becoming increasingly important, as the trend is now towards rising net exports, particularly of diesel.
Crude imports were 5.93 million barrels per day, slightly below the average of 6.03 million bpd for the first eight months of the year.
This represents a gain of 450,000 bpd over the 5.58 million bpd imported in the first eight months of last year.
However, net fuel imports in the first eight months of last year amounted to about 246,000 bpd, while this year they were a paltry 17,000 bpd.
If the net fuel imports are added to crude imports, it takes year-to-date imports to 6.047 million bpd, and to 5.826 million bpd for the same period last year, a difference of just 221,000 bpd.
This is probably a more accurate reflection of mainland fuel demand, and even this picture may be overstated, given the likelihood strategic storages were being filled in the first half.
What this means is that the International Energy Agency's forecast for mainland oil demand to rise 2.9 per cent this year may be too optimistic, and a figure closer to 2 per cent is more likely.
Other commodity imports are sending warning signals, with unwrought copper flat on month, iron ore dropping 9.3 per cent and coal slumping 18.1 per cent.
Unwrought copper imports were 340,000 tonnes last month, bringing the year-to-date total to 3.2 million tonnes, a gain of 14.3 per cent from the same period last year.
This is still a relatively strong outcome, and given concern over the strength of manufacturing and housing construction, it would seem that imports are likely running ahead of actual consumption, meaning that stockpiling for financing purposes is still boosting demand.
Also worth noting is the trend shift in copper demand, with last month's ore and concentrate imports rising 6.7 per cent on the month and 18.5 per cent on the year to 7.29 million tonnes. This is confirmation that mainland copper smelters have increased capacity, and it is likely this trend will continue.
In iron ore there are some worrying signals as well.
Last month's imports of 74.88 million tonnes were down 9.3 per cent from July.
While imports are still up a strong 16.9 per cent year-to-date, the concern for iron ore producers will be that mainland steel mills are not ramping up purchases in response to lower prices, as they did in the past.
Spot Asian iron ore has fallen 38 per cent from the start of the year to US$83.60 a tonne on September 5, a four-year low.
It may be that a small rally in prices between mid-June and mid-July had a negative impact on buy orders, so it will be interesting to see if the 12.5 per cent drop in the price since the beginning of last month acts as a spur to imports this month and next.
With coal, there is no way to sugarcoat the import weakness.
Just 18.86 million tonnes were imported, down 18.1 per cent from July, while year-to-date imports are down 5.3 per cent at 201.76 million tonnes.
Coal is suffering because of higher hydropower demand and actions by the authorities to limit its use in a bid to combat the high levels of air pollution, and not even prices at a four-year low is enough to boost imports.
Spot thermal coal at Australia's Newcastle port, an Asian benchmark, dropped to US$67.45 a tonne in the week to September 5, down 22 per cent so far this year and less than half the post-2008 recession peak of US$136.30 from January 2011.
The worry for commodity producers is mainland imports are not as responsive to price signals as they were in the past, with lower prices not necessarily resulting in heavier buying.
Reuters


China commodity imports send warning signals

The mainland was a net fuel exporter for four months.

Business

Commodities

The impact of the country's trade in refined products is becoming increasingly important as the trend is now towards rising net exports


If you tried to distil the mainland's commodity imports for last month into a single word, that word may be cautious.


.css-sioo19{color:#c79a00;}Analysis | China commodity imports send warning signals

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The impact of the country's trade in refined products is becoming increasingly important as the trend is now towards rising net exports

Analysis | China commodity imports send warning signals

The impact of the country's trade in refined products is becoming increasingly important as the trend is now towards rising net exports