Record year for Chinese imports of commodities signals economic recovery
Beijing — China’s commodity imports jumped again in December, pushing 2016 figures for goods such as crude and iron ore to record levels.
For 2016, shipments of oil, iron ore, unwrought copper, copper concentrates and soybeans hit record highs, the General Administration of Customs said on Friday.
Coal was the exception, but imports were still up by a quarter on a year ago.
Oil and soybeans also hit record monthly totals in December, while coal shipments were among the highest on record and iron ore notched up the third biggest volumes for the year.
The splurge helped spur stronger-than-expected imports for the world’s largest trading nation.
The data reflected a major recovery by the world’s second-largest economy as hefty government spending in infrastructure fuelled demand for base metals and steel, and Beijing’s efforts to clean up dirty industries like coal forced utilities to go abroad for lower-priced supplies.
There is concern, however, that economic growth may slow in 2017, tempering demand.
But lower output of major products like crude and coal and buoyant domestic prices could prolong the boom.
Record oil imports of 8.56-million barrels a day (bpd) in December buoyed crude futures, with shipments expected to continue rising in 2017 as domestic output slows and Beijing issues more import quotas to independent refiners, known as teapots.
Their rapid expansion drove crude imports and, perhaps more worrying for their Asian refiners, forced the state-owned producers to sell a record amount of product abroad.
Seng Yick Tee, a researcher with consultancy SIA Energy, said he expected China’s crude imports to rise by 600,000 bpd in 2017, with teapots accounting for two-thirds of the increase.
Coal arrivals were up more than 50% from a year ago, the latest sign that government-enforced mine closures have forced utilities to buy from abroad.
If Beijing renews its effort to curb small, privately owned coal mines after the Lunar New Year, buying could exceed 2016 levels, traders said.
Iron-ore imports are expected to remain strong into this year as steel mill demand stays firm, even as the government continues its crackdown on inefficient capacity.
In 2016, 45-million tonnes of capacity was closed, but most of this was already idled.
"We’re forecasting crude steel production to rise about 1%, and we’d expect Chinese demand for iron ore to increase at a similar level," said CLSA research head Andrew Driscoll.