- Chinese commodity imports remained firm last month despite most falling from the levels of a month earlier.
- Crude oil imports surged to the highest level on record, fuelled by demand from private refiners.
- ANZ Bank says robust underlying demand and supply-side reform measures will continue to drive strong import volumes.
Chinese commodity imports remained firm last month despite most falling from the levels of a month earlier.
This excellent-yet-simple table from ANZ Bank shows the breakdown, looking not only at the monthly change but also the movement year-to-date and from a year earlier.
There’s a lot of red in the monthly change column, except for crude oil imports which surged to the highest level on record, fuelled by demand from private refiners.
“Crude oil imports rose… as uncertainty around tariffs on US imports and sanctions on Iran eased,” said Daniel Hynes and Soni Kumari, Commodity Strategists at ANZ.
“We also saw demand from China’s independent refineries rise, with operating rates increasing steadily in October after returning from seasonal maintenance.”
At 9.61 million barrels per day, the October figure surpassed the previous peak of 9.6 million barrels per day set in April of this year.
The spike in Chinese demand coincided with front-month Brent crude oil futures surging to fresh four-year highs in early October. They’ve since fallen by 20%, leaving prices in a bear market.
While all other major commodity imports fell, from a year earlier, they all surged, driven in part by front-loading of orders ahead of the introduction of fresh tariffs on US imports and strong demand.
“While most commodities recorded monthly falls, growth remained high on a year-on-year basis,” said Hynes and Kumari.
“Copper and crude oil demand was particularly strong, while iron ore and coal recorded solid growth.
“We suspect a combination of robust underlying demand, including a rebound in infrastructure spending, and supply-side reform measures will continue to drive strong volumes.”
More broadly, the value of both Chinese imports and exports exceeded market expectations in October on a year-ended basis.
According to China’s General Administration of Customs, the value of exports grew by 15.6% in US dollar terms, faster than the 14.5% pace reported in September and expectations for a moderation to 11%.
Import growth was even faster than exports, lifting by 21.4% in USD terms, above the 14.3% level of a month earlier and forecasts for an increase of 14%.
The net result was the that the trade surplus swelled to $US34.01 billion, up from $US31.7 billion in September. That was marginally below the $US35 billion expected.