(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.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
