Shanghai : China imported the most copper in 16 months in September and iron ore shipments hit their highest in eight months, a sign that heavy fixed asset investment was still powering demand for some commodities.
The rise in metal and bulk commodity imports, despite a narrowing trade surplus indicating weaker external demand, suggests that China’s habit of buying on dips would continue and should lend support to prices that took a hammering last month.
“Overall the numbers are positive and show that the asset investments and the committed project pipeline is supporting commodities demand,” said Nicholas Zhu, head of macro-commodity research at Australia and New Zealand Bank in Shanghai.
China’s commodity demand has proved to be resilient despite external headwinds, thanks in part to the government’s building of over 10 million houses, power transmission networks, as well as investment in the less-developed central and western provinces.
Still, analysts cautioned that the data could be partly distorted by a rush to get goods delivered before the week-long National Holiday in October.
An attractive discount for international over domestic prices would have also encouraged merchants to buy for stockpiling, which means actual consumption could be lower than the numbers suggest.
Crude oil imports into the world’s second-largest oil consumer edged up in September from the preceding month to 4.98 million barrels per day, official data from China’s customs authority showed on Thursday.
They were down 12.2% from record highs a year ago and also stood below the 5 million bpd mark for the fourth consecutive month.
Imports of unwrought copper and semi-finished copper products rose 11.8% from the previous month as importers took spot shipments on improved margins.
“This is a bit better than we thought it would be. Through September the arbitrage improved a lot and the absolute price fell a lot so Chinese consumers took advantage of that and given the price action since then we wouldn’t be surprised at all to see further gains in imports in October and November,” said David Thurtell, an analyst at Citigroup.
Iron ore imports defied expectations of a fall to climb 2.5% from the previous month to 60.57 million tonnes -- its highest monthly figure since January.
Global copper prices fell 5.6% in August, followed by another 24% tumble in September, while iron ore prices also fell 5.5% in September.
The customs agency said year-to-September coal imports rose 1.9% from a year ago to around 120 million tonnes. Reuters calculations show September imports have jumped to a record at around 20 million tonnes.
Agriculture imports proved to be a laggard.
China, the world’s largest soy buyer, imported 4.13 million tonnes of soybeans in September, down 11% from the year ago period, as negative margins prompted crushers to cut back on orders.
China’s trade surplus narrowed in September for a second straight month as growth of exports and imports both pulled back, reflecting global economic weakness and domestic cooling.