China’s commodity imports for November suggest demand is strong; with most sectors recording a solid bounce from October.
But high import volumes in late 2019 pushed some annual growth rates into negative territory. The recent price rally ahead of the seasonal demand slowdown may stabilise imports in coming months.
Oil imports were resilient against expectations of a slowdown amid rising product inventories and tighter refining margins.
This was also the case in LNG, where expectations of a colder than normal winter drove demand. However, volumes for both commodities were flat on an annual basis.
Iron ore imports remained strong. The normal seasonal slowdown saw imports dip below 100mt but still up 8.3% y/y.
Falling port stockpiles suggest import demand will remain strong. Coal imports fell for the fourth consecutive month following China import restrictions.
However, a rally in domestic coal prices may force authorities to add import quotas, amid strong heating demand.
Refined copper imports also felt the seasonal slowdown. A tightening of SHFE-LME spreads may have made import arbitrage less attractive.
China’s plan to build strategic reserves is also likely to keep imports resilient. Easing supply tightness in the concentrate market lifted imports by 8% m/m.