China’s resilient imports contrast with weak exports
If the sharp plunge in China’s exports in February shows anything, it’s that a gap is opening between what the country is shipping out and its still resilient imports of major commodities. Exports dropped 20.7 per cent in February from the same month a year earlier, the largest decline in three years and much bigger than the 4.8 per cent fall forecast by analysts. For some observers this will be enough to confirm that the world’s second-largest economy is struggling under the weight of the trade dispute with the United States and generally softer global growth.
A look at the imports of major commodities, however, paints a somewhat different picture, with crude oil, coal, iron ore and copper all performing reasonably well.
There is little point in looking at the February trade numbers in isolation, given the impact on trade flows caused by the timing of the Lunar New Year holidays.
This year the holiday fell early in February, pulling import demand forward into January, and thereby yielding weaker February numbers.
Nonetheless, crude oil imports were 10.23 million barrels per day (bpd) in February, the third-highest on a daily basis and above January’s 10.03 million bpd.
For the first two months of the year, crude imports were 12.4 per cent higher than for the same period last year.
While crude demand is likely to have been boosted by inventory building at new refineries, it’s also likely that fuel use is fairly robust due to increased construction activity.
Exports of refined products were down 29.8 per cent in February from January, suggesting the additional crude imported is staying in China to meet local demand.
Copper imports in February may initially look somewhat weak, but the details are more encouraging.
Imports in unwrought copper were 311,000 tonnes, down 33.8 per cent from January’s 470,000, but the two-month total was only 0.6 per cent lower than the first two months of 2018.
Turning to copper ores and concentrates, while February saw a small gain of 1.9 per cent from January, imports for the first two months of the year were 24.9 per cent higher than for the same period in 2018.
Iron ore didn’t look strong on the surface, with February imports soft at 83.08 million tonnes, and the total for the first two months coming in at 174.4 million tonnes, a drop of 5.5 per cent over the same period in 2018.