Once again, China's appetite for major commodities clashes with the uneven health of the country's massive manufacturing sector.
Deflation still grips manufacturing, with producer prices down for over 14 consecutive months. Consumer prices also face deflation, though there's potential for improvement in upcoming data.
Despite these challenges, recent commodity import data from China's Customs Administration indicates a strong start to the year for key sectors, albeit with weak copper demand. Coal imports remain high, signaling ongoing struggles to meet power station stock requirements as the Winter Heating Season concludes.
Additionally, LNG and natural gas imports have hit record levels in the first two months of the year.
Iron ore imports have surged by 8.1% compared to previous years, driven by better-than-expected supply from Australia and the leap year's additional day.
While steel exports have seen a remarkable increase, coal imports have also soared to all-time highs, defying expectations of a slowdown.
Furthermore, oil imports have maintained moderate levels, while natural gas imports, particularly LNG, have reached unprecedented highs.
However, copper imports have seen only a marginal increase, despite its significance in various industries, due to supply constraints and falling global prices.
The sudden shortage in copper supplies has led to smelters reducing treatment and refining charges, impacting their revenues and financial stability.
Overall, the disparity between China's robust commodity demand and manufacturing challenges underscores the complexities of its economic landscape.
