China’s appetite for commodities seems to again be outrunning the pace of economic growth.
Trade data for March showed the country once again spent heavily with inbound shipments of most major commodities surging in volume and value.
Both value and volumes were influenced by the comparative base in 2020 being the deeply recessed month of March 2020 and the March quarter of the same year as China’s economy saw growth slump 6.8%.
Tomorrow’s growth data for the three months to March will be strong and help explain the underlying strength in demand for key commodities in the wake of the recovery from 2020’s miseries.
The onset of the pandemic saw commodity prices fall sharply from late January onwards into April (when oil prices actually briefly fell below zero for US crude).
Copper prices also slumped to just under $US2.15 a pound – it was trading around $US4.03 a pound on Tuesday and hit a multi year high of $US4.3755 a pound.
But imports of iron ore, copper, cereals and oilseeds all rose in volume in March and the March quarter.
China’s crude oil imports jumped 21% in March from a low base of comparison in March 2020 as refiners boosted operations thanks to rising demand for petrol and jet fuel.
Customs Bureau data on Tuesday revealed that China imported 49.66 million tonnes last month, equivalent to 11.69 million barrels per day (bpd). March imports were down from 11.73 million bpd last month.
For the March quarter, imports totalled 139.23 million tonnes, or 11.29 million bpd. That compared to 10.2 million bpd over the same period a year earlier or 127.2 million tonnes, a rise of just under 10%.
China’s imports of gas (including LNG) rose 26.1% in March to 8.73 million tonnes and were up 19.1% from 24.66 million tonnes a year ago to 29.39 million tonnes in the three months to March.
Imports of iron ore totalled more than 102 million tonnes in March, up sharply from the depressed levels of Covid-hit March 2020.
For the quarter iron ore imports totalled 283.44 million tonnes, up nearly 8% from the 263 million tonnes in the first quarter of 2020.
China exported 7.54 million tonnes of steel products and brought imported 1.32 million tonnes last month. China’s steel exports rose 23.8% from a year earlier to 17.68 million tonnes for the first quarter. Imports of steel in the quarter rose 17% to 3.72 million tonnes, according to the customs data.
China’s March copper imports jumped 25% from March 2020 when demand was cut by the impact of the lockdowns and Covid.
The Customs report revealed imports of unwrought copper and products totalled 552,317 tonnes last month, up from 441,926 tonnes in March 2020 and up 34.7% from a 13-month low of 410,040 tonnes in February.
Copper imports in the first quarter totalled 1.44 million tonnes, up 11.9% year-on-year, and the highest first-quarter amount since at least 2008, according to Reuters.
Imports of copper concentrate, or partially processed copper ore in March amounted to 2.17 million tonnes and were the highest on record.
Imports were up 22% from 1.779 million tonnes a year earlier, and up 20.5% from 1.8 million tonnes in February.
First-quarter imports of concentrate rose 7.4% year-on-year to 5.96 million tonnes. That was also the highest first-quarter amount since at least 2008, according to Reuters.
China’s exports of unwrought aluminium and aluminium products fell 14.5% year-on-year to 443,484 tonnes in March. That was up 18.8% from 373,349 tonnes in February, which was the lowest in eight months.
China Jan-March corn imports at 6.73 million tonnes, wheat imports at 2.93 million tonnes and soybean imports at 21.18 million tonnes
Imports of soybeans rose 19% to 21.278 million tons in the quarter.
Imports of major crops spiked in the first quarter. Corn imports rose by 437% to 6.727 million tons, and wheat was up by 131.2% to 2.925 million tons.
Meat imports topped 1 million tonnes in March alone and more than 2.63 million tonnes for the quarter.
This appetite is only going to increase in coming years as living standards rise and demand for metals, energy and similar commodities overtaken by demand for more food.