(Bloomberg) — China’s appetite for commodities eased in June, as a sluggish economy took the edge off import demand across a number of key raw materials.
Over the first six months of 2024, the world’s top importer bought less crude oil, soybeans, edible oils, meat and rubber, compared to last year. That’s unusual in markets that often see record demand each year as China’s economy expands. Some metals imports have also started to slow, while growth in coal purchases has weakened substantially.
China’s economic growth likely weakened in the second quarter, with the downturn in the property market, fiscal strains at the local government-level, and increasing trade protectionism around the world, leading a daunting set of challenges for policymakers to consider at next week’s Third Plenum in Beijing.
Energy Products
Crude oil imports in June fell on both a monthly and annual basis to 46.45 million tons, in line with indications that the rapid take up of electric vehicles means Chinese demand may already have peaked. Over the year to date, shipments are 2.3% lower than last year.
Purchases of power plant fuels have held up better, despite ample inventories and a rising contribution from hydropower and other renewables, as China continues to prioritize security of supply. In June, coal imports climbed on both a monthly and annual basis to 44.6 million tons, while natural gas held above 10 million tons for an eighth consecutive month.
Coal imports have risen 13% over the year so far, well below the 93% growth recorded in the first six months of 2023.
Metals Markets
Iron ore imports dipped below 100 million tons for the first time in four months as cash-strapped steel mills scaled back purchases. Exports of the alloy, a key channel for mitigating soft domestic consumption, also eased, falling below 9 million tons for the first time since February.
China’s unwrought copper purchases slipped to a four-month low after record international prices in May suppressed already weak demand. Concentrate imports increased, however, despite tighter global supplies as smelters continued to expand capacity.
Aluminum exports rose to near a two-year high as overseas demand for the metal picked up despite a narrowing in the premium on outbound shipments.
Farm Goods
Soybean purchases in June climbed above 11 million tons, the highest in over a year, as traders took advantage of cheaper Brazilian beans. But for the half-year, they’re still 2.2% off last year’s pace. Imports of other agricultural goods continued to show weakness as a slowing economy saps consumption.
–With assistance from Winnie Zhu, Kathy Chen, Audrey Wan and Hallie Gu.
Source link
Related
