- Crude oil imports fell 9% in May but still up 9% year-on-year
- Copper imports down 15% in May but are 6% ahead YoY
- Iron ore and soybeans imports also saw declines in May
By Ole Hansen
Recent trade data for May from China showed a major jump in exports and as imports simultaneously contracted the trade surplus widened sharply to 35.9 billion dollars. Four of the key commodity imports all showed signs of weakness which helps to explain this development.
Crude oil imports fell 9 percent from April's record levels as state stockpiling together with lower refinery demand due to maintenance reduced demand. Overall, the demand is still up by a healthy 9 percent year-on-year so no major sign of slowing appetite for oil at this stage.
Copper imports fell by 15 percent to 380,000 tons which is matching the February low point. The increased (negative) focus on metals being use to obtain finance and the recent slide in the value of the yuan has most likely help drive down imports. The year-on-year data is still showing a healthy rise of 6 percent.
Iron ore imports fell by 7.2 percent during May as the global availability of supply continue to rise faster than demand. The price of seaborne iron ore delivered Chinese ports has fallen by almost one-third year-to-date due to high inventories at a time of slowing demand growth.
China, the world's biggest buyer of soybeans, saw a drop of 8.2 percent during May to 5.97 million tons. A major jump in imports earlier this year has led to the market being oversupplied which in turn has put crushing margins under pressure and this could lead to another reduction in imports during June. This should further help to alleviate some of the price pressure on old crop soybeans traded in Chicago.
Ole Hansen is head of commodity strategy at Saxo Bank. For more of his articles, please click here.
— Edited by Clare MacCarthy