China’s January trade account wore the impact of the late Lunar New Year holiday break which starts late next week and the country’s trade surplus fell to its lowest level in 11 months.
As a result imports and exports for the month both surged, as imports and exporters brought forward shipments to January, more than halving the size of the trade surplus from December.
Imports though are always more impacted than exports by the timing of the Lunar new Year break and this time round they surged by well over 30% as higher volumes of commodities poured in through China’s ports. In a month’s time the February trade report will be be impacted the other way as imports and exports are delayed by the week long holiday. March could also show some impact as well (it has in the past when the holiday break is in mid to late February.
But we can also ‘blame’ a surge in higher priced oil imports for the sharp rise in total imports last month. On top of the timing issue, crude oil imports surged 7 million tonnes from a year ago to a new all time high of 40 million, while global oil prices were up just over 20% year on year last month (for Brent type crudes)
Some experienced analysts treat January and February as a single month and then average the data over the two month period to try and eliminate some of the distortions caused by the timing of the holiday break. The country’s Customs department said January exports rose 11.1% from a year earlier, picking up from a 10.9% rise in December. Analysts had expected growth to cool for a second straight month to 9.6%.
Imports surged 36.9%, the General Administration of Customs said, the fastest pace since last February and much, much faster than market forecasts for a rise of 9.8%.
It was also considerably faster than the sluggish 4.5% rise in December ( the stocking effect was more pronounced in December 2016 by the earlier timing of the Lunar New Year break in 2017.
Commodities again led the way in January, with crude oil imports hitting a record 40 million tonnes, significantly higher than the 34.03 million tonnes in January of last year and above the 34 million tonnes of last December.
Iron ore imports were the second highest on record at one hundred million tonnes, up sharply from the 84.14 million tonnes imported in December and the 92 million tonnes in January, 2017. The record of 102.88 million tonnes was set in September 2017.
Coal imports jumped to 27.81 million tonnes, the highest since January, 2014. That was up on the 24.91 million tonnes imported in January, 2017 and the 22.74 million tonnes last December
And copper metal imports hit 400,000 tonnes, up from the 380,000 tonnes imported in January of last year.
The figures left the country with its smallest trade surplus in 11 months at $US20.34 billion, compared with December’s $US54.69 billion and forecasts for a $US54.1 billion surplus in January.
China’s soy bean imports totalled 8.48 million tonnes, up on the 7.66 million tonnes imported in January 2017, but down sharply from the 9.5 million tonnes imported last December.
Natural gas imports more than doubled from a year ago’s 3.44 million tonnes to 7.7 million tonnes last month and 7.89 million tonnes in December.
