China's import trends in May




Amid the slower-than-forecast imports for China for May, the usual suspects - iron ore, copper, and coal - stood out, but oil slid, even though global prices were not all that strong.

In fact, some canny analysts reckon China trimmed oil imports because of weak refining margins and the growing impact of growing sales of NEVs - Battery and Plug-in Hybrids - which are reducing demand for petrol (and impacting margins).

China's iron ore imports in May stayed above 100 million tonnes for a third straight month, customs data showed on Friday.

The world's largest iron ore consumer imported 102.03 million tonnes in May, according to the monthly data from China’s General Administration of Customs.

That was far away from the 101.82 million tonnes imported in April (and was the third 100 million tonne-plus month in a row) and 96.17 million tonnes in May 2023.

Persistent higher imports saw a steep rise in portside inventories, which climbed to 145.5 million tons by the end of May, the highest since April 2022, Mysteel reported last week.

For the first five months of 2024, China's iron ore imports totaled 513.75 million tonnes, a year-on-year increase of 7%, the data showed.

Now, when will China start limiting steel production to cut coal consumption and carbon emissions? It’s been threatened, now to see what actually transpires.

China's imports of coal rose 11% in May from a year earlier, as lower domestic output this year saw higher inbound shipments.

Coal imports totaled 43.82 million tonnes last month, the customs data showed. That compared with 39.58 million tonnes in May 2023.

Imports were down 3% from 45.25 million tonnes in April.

China's coal output in April fell to its lowest since October 2022. Safety inspections following more deadly mining accidents have restricted production this year in the top coking coal hub of Shanxi.

Coal imports in the first five months were up 12.6% to 204.97 million tonnes from the same period in 2023.

May saw China continue to soak up as much copper metal as it could get, even though prices surged to record highs in the month (then eased late in May and this last week).

The Comex futures price peaked at an all-time high of $US5.199 a pound, but had fallen back under $US5 a level within days as a speculative squeeze was worked out very quickly.

But the surge in prices didn’t deter China (it does in coal, iron ore, and other commodities), and the country boosted imports by nearly 16% in the month from a year earlier (when they were lower as the country emerged from the Covid lockdowns and uncertain domestic demand).

Imports of unwrought copper and products in China, the world's biggest consumer of the metal, were 514,000 tonnes last month, compared with 444,010 tonnes a year earlier. Imports were up 17.4% from April, despite rising prices.

Reuters reported that the double-digit gains came as a surprise to many in the market given that actual consumption was weak last month amid record high copper prices.

"Some more Russia-origin copper could flow into China following western sanctions on Russian metals," said He Tianyu, a Shanghai-based copper analyst at CRU.

Following sanctions on Russian metals by the U.S. and UK governments in April, the London Metal Exchange and Chicago Mercantile Exchange banned from its system Russian aluminum, copper, and nickel produced from April 13.

And the Democratic Republic of the Congo (DRC) also shipped more after delays in shipments caused by logistics hurdles earlier, CRU's He added.

In the first five months, China imported 2.33 million tonnes of unwrought copper and products, up 8.8% from the same period in 2023.

Imports of copper concentrate were 2.26 million tonnes for May, down 11.7% from a year earlier. That’s the true indicator of China’s desperation; with a severe shortage of concentrates globally, China is finding it harder to secure material for its huge processing sector, the world’s largest, producing around 48% of annual global copper production.

Imports totaled 11.59 million tons in the first five months of 2024, up 2.7% from a year earlier.

And finally, China's crude oil imports in May fell 8.7% from a year earlier, as refiners reportedly scaled back purchases amid heavy plant overhauls and subdued profit margins.

May imports totaled 46.97 million metric tons, or about 11.06 million barrels a day (bpd), data from the General Administration of Customs showed.

That is up from April's figure of 10.88 million bpd and off a strong base a year earlier at 12.11 million bpd.

But demand for petrol is slowing because of the rise of new energy vehicle sales across the country.

Reuters said the lower imports came as large state-run refineries such as Sinopec's Zhenhai and Zhanjiang, PetroChina's Dushanzi and Dalian plants undergo regular maintenance, Chinese commodities consultancy Oilchem said.

Imports for the January-May period totaled 229.03 million metric tonnes, or about 11 million bpd, down 1.2% from the corresponding period of 2023.

Customs data also showed China's natural gas imports for May rose 6.5% from a year earlier to 11.33 million tonnes, bringing year-to-date volumes to 54.28 million tonnes, up 17.4% higher than the year-earlier levels. Importers took advantage of weak prices in the north Asian markets.


Name Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.