China’s imports of iron ore, crude oil, coal and copper all fell in October, slowing after strong demand drove global prices of many major commodities higher this year.
That slowing saw a mixed month for China’s imports and exports – helped by fewer working days in October because of the shift in the timing of the mid-Autumn festival that saw China’s trade surplus rise by $US10 billion. As well imports volumes of iron ore fell as cuts to steel production and pollution-reducing production cuts hit home.
In a sign of the impact of the cut in steel output China’s iron ore imports of 79.4 million tonnes were the lowest 20 months – since February 2016. That news had little impact on iron ore prices – they fell 40 cents to $US62.26 according to the Steel Bulletin overnight Wednesday.
Imports of copper, a key material used in building construction, fell to a 21-month low at 320,000 tonnes last month, while coal imports fell 12% from September’s near record high of more than 27 million tonnes.
But the trade data shows that imports from Australia rose 16.3% in October from a year ago.
China’s exports rose less than expected in October while import growth slowed at a faster rate, meaning the trade surplus rose from a half-year low in September to $US38.2 billion from the September’s revised six-month low of $US28.6 billion (previously $US28.5 billion).
The dollar value of exports rose 6.9% year on year in October, slowing from a pace of 8.1% in September. Imports slowed to a year-on-year pace of 17.2% for the month, down from a revised rise of 18.6% a month earlier (previously 18.7%).
China’s exports in the first 10 months of the year fell 7.7% from the same period a year earlier, while imports dropped 7.5%.
But Julian Evans-Pritchard, China economist at Capital Economics, noted that a shift by the Mid-Autumn Festival had resulted in fewer working days during October 2017 compared to a year ago, and that in adjusted month-on-month terms both exports and imports had contracted last month at roughly the same paces as in September.
The weaker export and import figures add to recent signs of a cooling in economic momentum as the war on smog and tighter rules to reduce China’s years-long addiction to debt drags on overall activity.
The latest data showed shipments to the United States rose 8.3% on-year in October, while imports increased 4.3%. That resulted in $US26.62 billion trade surplus with the US last month, according to Reuters, down from a record $US28.08 billion in September.
Exports to the EU fell 8.7%, a slight improvement from the previous month while China’s imports from Southeast Asia rose 18.4% in October.
China’s iron ore imports fell nearly 23% in October to 79.4 million tonnes, from the all time high of 102.8 million tonnes in September with steel mills cutting output as part of a government drive against pollution in the northeastern and northern provinces around Beijing. China imported 88.7 million tonnes in August.
October’s figure was the lowest since February. China imported 80.8 million tonnes in October 2016, which was the lowest since February of that year.
China’s January-October iron ore imports were up 6.3% at 896 million tonnes from a year ago, down from the 7.6% rise in the first 9 months of the year.
Steel exports fell 3% on-month to 4.98 million tonnes last month, hitting their lowest since February, 2014.
Coal imports fell nearly 12% from September (to just over 23 million tonnes) despite worries that power companies have low inventories heading into winter.
Coal imports had jumped nearly 11% to 27.08 million tonnes in September from a year ago. October’s figure was also lower than the 25.27 million tonnes imported in August.
China’s October oil imports fell sharply to 7.3 million barrels per day from a near record-high of about 9 million barrels per day (bpd) in September. That was the lowest level since October 2016.
“Lower imports reflected less purchases from independent refineries as many of them are running out of crude quotas for this year,” said Li Yan, oil analyst with Zibo Longzhong Information Group.
For next year, however, independent refiners will see a boost their imports as Chinese authorities on Wednesday raised their 2018 crude oil import quota by 55% over 2017, to 2.85 million bpd.
China’s Janury-October crude oil imports were up nearly 12% on the same period of 2016 at 349 million tonnes. China Jan-Oct nat gas imports jumped 25% year on year at 54.16 million tonnes.
China’s Jan-October unwrought copper imports fell 8% to 3.76 million tonnes, while copper imports in October slumped to 320,000 tonnes, the lowest for nearly two years and down from 430,000 tonnes in September.
