METALS MIXED
Imports of unwrought copper were also soft, slipping 9.3% in
the January-February period to 879,000 tonnes.
It's likely that the Lunar New Year break dampened import
demand, and it's also worth noting that copper imports were
robust in 2022, suggesting that manufacturers and builders have
built up solid inventories and can use these before returning in
strength to the import market.
Where there was signs of an economy emerging from its now
abandoned zero-COVID policy was in imports of iron ore and coal.
Imports of the steel raw material were 194 million tonnes in
the first two months of the year, up 7.3% from the same period
in 2022, and a contrast to the overall decline of 1.5% for the
whole of last year.
Steel mills have been restocking ahead of the busier
construction period that starts as winter ends, and Beijing's
efforts to stimulate growth through infrastructure spending have
stoked optimism.
Coal imports were 60.64 million tonnes in the first two
months, up 71% from the same period a year earlier, although
it's worth noting that they were unusually weak at the start of
2022.
However, the coal imports were largely in line with
December's figure of 30.91 million tonnes and November's 32.31
million, suggesting that demand is steady at relatively robust
volumes.
What is interesting is that it appears the strength in the
first two months was driven by overland imports, rather than
arrivals via ship.
Seaborne arrivals in the first two months were 47.72 million
tonnes, according to commodity analysts Kpler, suggesting that
arrivals overland from neighbouring countries were around 13
million tonnes.
This implies a strong outcome for imports from Mongolia,
which also usually ships more coking coal than thermal, another
pointer to strength in the steel sector.
The opinions expressed here are those of the author, a columnist
for Reuters.
(Editing by Christian Schmollinger)
(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Clyde Russell
LAUNCESTON, Australia, March 7 (Reuters) - China's
imports of major commodities showed both the potential for an
acceleration this year and the reality that economic momentum
takes time to build.
Official customs data from the world's biggest commodity
importer showed a mixed picture for the first two months of
2023, with strength in iron ore and coal being offset by
weakness in crude oil, natural gas and copper.
Supporting the bullish case for China's commodity demand is
that iron ore, the key raw material to produce steel, is more
often a leading indicator, as steel mills tend to restock ahead
of anticipated demand.
The same can be said of coal to some extent, especially
coking coal used to produce steel, but also the thermal grade
used to generate electricity as utilities will want adequate
inventories ahead of any surge in demand.
In contrast, crude oil imports tend to move with a lag to
actual or expected gains in demand, given physical cargoes are
typically arranged several months prior to actual delivery at
ports and transportation to refinery units.
China releases combined commodity trade data for January and
February to avoid distortions created by the variable timing of
the week-long Lunar New Year holiday, which began on Jan. 21
this year.
Crude oil imports were 84.06 million tonnes for the first
two month, which is equivalent to 10.40 million barrels per day
(bpd), according to the data, released on Tuesday.
This was 1.3% below the same period in 2022 and was also
lower than the 11.32 million bpd seen in December and the 11.37
million bpd in November.
The official numbers also contrasted somewhat with
vessel-tracking and port data compiled by Refinitiv Oil
Research, which showed combined imports for the first two months
of 91.69 million tonnes, or 11.34 million bpd.
The gap of around 940,000 bpd between the official number
and Refinitiv's estimate is unusually wide, suggesting the
difference may be as to when cargoes are assessed as having
cleared customs.
This raises the possibility of a strong rebound in the
customs numbers in March, but for the meantime, there is no
official evidence of accelerating crude oil imports in China,
even though the independent tracking services believe there is.
Joining crude oil in the weak column were imports of natural
gas, both via pipelines and as liquefied natural gas (LNG),
which fell 9.4% in the first two months of the year to 19.93
million tonnes.
High spot prices for LNG combined with a relatively mild
winter and higher reliance on coal were the most likely culprits
behind the soft outcome.
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