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China's October commodity imports highlight uneven growth amidst positive GDP outlook

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2023-11-08

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In October, China's major commodity import data confirmed the uneven growth across its economy, even as the International Monetary Fund (IMF) upgraded its forecast for Chinese GDP growth to 5.4% for the year, up from the previous 5% estimate. The IMF attributed this improvement to recent measures to stimulate demand and support the property sector, which is expected to help the economy in the final months of the year.

However, the IMF still predicts a slowdown in growth to an annual rate of 4.6% in 2024 due to ongoing weaknesses in the property market and subdued external demand.

Despite these challenges, October's commodity import data suggests that there is still demand to drive inbound shipments. Notably, China's iron ore imports in October dropped by 1.8% from September but remained substantial at 99.39 million tonnes. This figure was affected by national holidays at the start of October but marked a 4.6% increase from a year ago when demand was impacted by COVID-19 restrictions.

In contrast, China's crude oil imports increased by 13.52% in October compared to the previous year, totaling 48.97 million tonnes or 11.53 million barrels per day. This boost in imports was driven by expanded domestic fuel demand during the Golden Week holiday.

China's coal imports, however, fell by 14.6% in October to 35.99 million tonnes due to high stocks that reduced demand from power utilities. Despite this decline, total coal imports for the first 10 months of the year were up by 66.8% compared to the same period in 2022. Some regions in China may face power shortages in the winter, potentially supporting continued coal demand.

In a different sector, China's copper imports surged by 23.7% in October compared to the previous year, reaching a 10-month high of 500,168 tonnes. Low inventories in the domestic market and solid demand drove this increase. Copper stocks on the Shanghai Futures Exchange were at a 13-month low in late October, down 85.6% from a peak in March.

Furthermore, Chinese concentrate imports from January to October totaled 22.6 million tonnes, an increase from 20.7 million tonnes the previous year. In October alone, China imported 2.31 million tonnes of copper concentrate, up from 2.24 million tonnes in September and from October 2022.

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