Once again, China's imports of key commodities tell us a lot about the health of demand and economic activity – not very healthy, but not dead.
It was, in fact, another mixed month that matched the weak inflation figures, showing another contraction in producer prices and no movement in consumer price inflation in September.
Trade was again weak, though not as weak as it has been this year. Imports and exports both contracted by 6.2% last month, the smallest falls in some months.
Coal imports rose to record levels, as domestic production remains under pressure, while oil imports were also high. However, copper imports, a key commodity and the most watched of all the figures, fell in September to continue a weak 2023.
Imports of iron ore showed mixed results last month, depending on the comparison used.
Data later this week on retail sales, industrial production, investment, and third-quarter GDP growth will confirm the sluggish pace of activity in the world's second-largest economy.
Imports of unwrought copper fell by 5.8%, copper ore & concentrate by -1.4%, steel products by -28.%, meat by -7.7%, soybean by -7.4%, and rubber by -7.7%.
By contrast, purchases grew for crude oil (13.7%), refined products (84.6%), coal (27.5%), and iron ore (1.47%).
China's iron ore imports in September fell by 4.9% from August, to 101.18 million tonnes, but were up 1.4% from September 2022 when demand was impacted by Covid restrictions.
Lower steel margins in September hit buying interest among steel mills for iron ore imports, although cheaper and lower quality Indian ore is still in demand.
Only about one-third of Chinese steel mills surveyed were operating at a profit by the end of September, down from one-half in late August, according to data from consultancy Mysteel.
China's iron ore imports in the first nine months of 2023 totaled 876.65 million tons, still up a solid 6.7% from the same period a year before, according to customs administration data.
Another year of over 1.1 billion tons of iron ore imports is expected.
On the other hand, September saw another very strong month for coal imports, on track to exceed 400 million tonnes for the first time. Imports surged by 27.5% from the same month in 2022, driven by power stations seeking cheaper supplies ahead of the winter peak season.
September imports totaled 42.14 million tonnes, close to August's record of 44.3 million tons.
The recent strong coal imports are being supported by rising domestic coal prices. Qinhuangdao free-on-board (FOB) coal, a domestic benchmark, was assessed at $US151.68 a tonne a week ago, up from a more than two-year low of $US116.42 in mid-June.
The spot price for 5,500 kilocalories (kcal) coal from Australia's Newcastle port was assessed at $US143.22 a tonne on October 9.
During the nine months from January to September, China imported a record 347.65 million tonnes of coal, up 73.1% from the same period in 2022. At the current rate, total imports by the end of December will top 480 million tonnes.
The most closely watched commodity/activity indicator, China's appetite for copper, looked weak again in September as imports of the metal fell, but imports of ore and concentrates remained solid as Chinese refiners and consumers sought lower costs.
China’s copper imports fell 5.8% last month from a year earlier, customs data showed, as strong domestic production and limited demand weighed down appetite for overseas supplies.
Imports of unwrought copper and copper products, used widely in the construction, transport, and power sectors, totaled 480,426 tonnes in September.
Domestic production of refined copper has been strong this year, undermining efforts to source the material from overseas markets.
For the first nine months of 2023, China's unwrought copper and copper products imports fell 9.5% to 3.99 million tons compared with a year earlier.
China's imports of copper ore and concentrate, however, rose to 20.34 million tons in the first nine months, up 7.8% from September 2022.
Lower prices saw China's crude oil imports in September rise nearly 14% from a year earlier. Imports last month amounted to 45.74 million tonnes, or 11.13 million barrels per day (bpd).
Year-to-date imports are up 14.6% from a year earlier to 424.27 million tons, or 11.34 million bpd.
September’s levels eased around 10.5% in bpd terms from August’s figure of 12.4 million bpd.
China’s natural gas imports last month dipped to 10.14 million tonnes, from 10.85 million tonnes in August.
Gas imports were up by 8.2% year-on-year to 81.10 million tonnes in the nine months from January-September.
Chinese natural gas imports via pipeline and in the form of LNG during the January-September period were 87.76 million tonnes, up 8.2% year-on-year.
Soybean imports fell to a seven-month low as tighter customs inspections slowed cargoes, a common issue each year.
Meat imports also dropped due to weak pork prices and sluggish demand in the domestic market.
However, edible oil shipments continued to outpace last year, when Covid lockdowns hit consumption.
