China’s December and 2018 trade figures showed higher imports of oil, LNG, and coal, steady levels of iron ore shipments and lower levels for soybeans and copper.
Imports of iron ore fell for the first time since 2010, a development that will have impacted commodity exporters such as BHP, Rio Tinto, and Fortescue Metals Group.
In fact, the fall was concentrated in lower quality iron ore – higher quality (62% iron oxide) rose, according to industry analysis.
But some analysts expect mills to lift their purchases of lower quality (cheaper) iron ore in 2019 because of weaker profit margins. That could help the likes of Fortescue Minerals.
Full-year iron ore imports fell 1% to 1.064 billion tonnes in 2018 from an annual record of 1.075 billion tonnes in 2017.
Imports still topped 1 billion tonnes for the third year in a row.
Imports in December edged up to 86.65 million tonnes, up from 86.25 million tonnes in November, official customs data showed.
This year is expected to see China reduce iron ore consumption as steel output falls thanks to weaker demand in both domestic and global markets, according to the China Metallurgical Industry Planning and Research Institute in December.
Some analysts expect any fall to be small. high-cost electric arc steel mills are expected to cut production because of weaker profit margins, but conventional blast furnace businesses will maintain production levels because of their lower costs.
China’s steel exports fell by 8.1% in 2018, slowing the pace of decline from a 30% slump in 2017.
Exports were 69.33 million tonnes in 2018 compared with 75.41 million tonnes in 2017, according to the customs data.
December exports were 5.55 million tonnes up 4.7% from November.
China’s crude oil imports surged 29.9% year on year to 10.35 million barrels a day (b/d) in December, bringing total imports to 9.28 million b/d in 2018, up 10.1% from 2017.
This was the second time China’s monthly crude imports breached 10 million b/d, and was 1.2% lower than the record high of 10.48 million b/d in November 2018.
The country’s crude imports in December totaled 43.78 million tonnes, up 2.1% from 42.87 million tonnes in November.
Over the year, crude imports rose 10.1% to 461.9 million tonnes from 419.46 million tonnes in 2017.
China 2018 natural gas imports up 31.9% from 2917 to 90.39 million tonnes, a new annual record high. December’s natural gas imports totalled 9.2 million tonnes.
As expected China’s imports of soybeans fell in 2018 because of the trade war with the US.
The trade data from the Customs Administration showed soybean imports fell by 7.9% from 2017 earlier to 88.03 million tonnes. That was the first annual drop since 2011, according to Reuters.
Reuters data also showed that China’s December soybean imports at 5.72 million tonnes were the lowest December total since 2011.
China 2018 unwrought copper imports were up 12.9% from 2017 at 5.3 million tonnes, a new annual record high. China’s December unwrought copper imports totalled 431,000 tonne, down from December 2017 and November 2018.
Imports of coal hit a four year high of 281.5 million tonnes, despite a government push to keep shipments at 2017’s level.
That was a 3.4% rise on 2017, even as December’s imports tumbled nearly 47% to 10.23 million tonnes.
Reuters reported that “Traders and utilities cut back sharply on purchases at the end of the year following government signals, with utilities sitting on record coal stocks, pushing down domestic prices.”
“Utilities had been told they needed to keep imports in 2018 below the prior year’s level, amid abundant domestic supplies and slowing electricity demand growth.”
