China’s November trade performance was like the economy as a whole – solid enough but with continuing signs of the pressures being felt domestically, especially in the maintenance of adequate power supplies.
Commodity imports though were strong, led by iron ore, LNG, coal, copper, soybeans and copper – the usual suspects, according to the country’s General Administration of Customs.
Prices of major commodities such as copper, coal, iron ore and LNG all eased in November and it would seem Chinese buyers took advantage of those price falls, though quotas to import oil remain tight and hard to get.
Exports rose 22% year on year last month to $US325.5 billion. That was down from a 27.1% rise in October and forecasts around 19%.
Imports though took off, jumping 31.7% to $US253.81 billion as shipments of copper rose for a third month in a row, iron ore imports bounced back above 100 million tonnes, oil imports rose sharply and coal imports hit their highest level in 2021 thanks to the continuing pressures on power supplies from a shortfall in coal supplies.
That saw China post a trade surplus of $US71.72 billion last month, compared with the poll’s forecast for a $US82.75 billion surplus and October’s $US84.54 billion.
The data comes a day after China’s central bank announced a cut to the amount of cash that banks must hold in reserve, its second such move this year, to bolster slowing economic growth.
The latest cut was aimed at big banks and will release around $US188 billion – the July cut was larger and did nothing to help the economy or struggling property companies. Most of the releases will probably go to helping companies and banks handle short term debt.
November was the 14th straight month of double-digit growth in exports, but the rise was weakest growth since July.
In the 11 months to November China’s 2021 total imports and exports rose 22% to $US5.55 trillion. That was more than the figure for all of 2020.
For the first eleven months of the year, the trade surplus widened to $US581.71 billion from $US448.17 billion in the same period of 2020.
There was one major surprise – Chinese commodity imports were the strongest across the board for 2021, despite weak demand and high costs bedevilling the country’s huge manufacturing and export sectors.
A continuation of the price weakness from the previous month – especially in the final 10 days – in oil, coal, copper, iron ore and gas helped spark a rise in opportunistic imports.
Iron ore imports topped reached 104.96 million tonnes, the highest in 16 months, coal imports at 35 million tonnes was the highest this year, copper imports – wrought and in concentrate rose for a third month in a row and soybean shipments were also much higher.
Iron ore is of particular interest in Australia and November saw China’s iron ore imports rise 14.6% from October’s 91.61 million tonnes to hit their highest since July 2020.
The November figure was 6.9% above the level in November, 2020, according to data from China’s General Administration of Customers.
Analysts say the big rise was probably due to Chinese steel mills buying higher grade iron ore from Australia and Brazil to stock up through the Winter Olympics in February and the Lunar New Year break which is also in February next year.
Stocks at ports totalled more than 157 million tonnes last week which is very high and with demand weak from the property and construction sector, analysts would not be surprised to see a drop in tonnages in December through February.
62% Fe iron ore fines from the Pilbara delivered to northern China were trading around $US103 a tonne on Monday, well down from the May all time high of $US237 a tonne.
In the first 11 months of the year, China imported 1.04 billion tonnes of iron ore, down 3.2% from the corresponding period a year earlier.
Another month with a similar volume to November will still leave imports for all of 2021 below the record 1.17 billion tonnes in 2020 which is now the unofficial cap on imports of ore so far as the Chinese government is concerned.
China’s oil imports in November bounced back from the 3-year low in October, topping 41.79 million tonnes, up from 37.8 million in October but well down on the 45 million tonnes in November, 2020.
On a daily basis, that was 10.17 million barrels a day (bpd) last month, higher than October’s figure of 8.9 million bpd, but lower than 11.04 million bpd in November 2020.
In the first 11 months of 2021, total oil imports are down 7.3% from a year ago at 467 million barrels.
Gas imports rose to 10.73 million tonnes in November, up from 9.38 million tonnes in October and 9.1 million tonnes in November last year.
For the first 11 months of this year gas imports (LNG and pipeline) jumped 21.2% to 110 million tonnes.
The country’s coal imports surged in November because of the desperate need to maintain supplies to the country’s power stations to avoid a repeat of the blackouts and rationing seen in late September and early October.
China imported 35.05 million tonnes of coal last month, up from 26.94 million tonnes in October.
November’s arrivals were also far higher than the 11.67 million tonnes brought in a year earlier during a broad curb on coal imports led by the ban on coal from Australia.
Imports in the first 11 months of the year were 292.32 million tonnes, up 10.6% year-on-year. China has long had an unofficial cap on coal imports of 300 million tonnes a year. the power station supply problems will probably see that cap ignored with another month of strong imports in December.
Reuters reported that Chinese coal traders have been forced to sell cargoes at losses or tried to delay imports after government intervention triggered a 50% price drop in prices in October and early November that saw them saddled with loss-making tonnages.
Reuters also reported that Chinese authorities since October have also allowed some Australian coal, which had piled up at ports for almost a year due to contrived political tensions with Australia, to pass customs clearance.
Customs data showed that 777,915 tonnes of Australian coking coal was cleared in October.
Meanwhile China’s copper imports in November rose for a third straight month hitting their highest volumes since March.
Opportunistic buying at lower prices and increased demand from copper processors after the power problems eased, were the factors cited for the solid rise by analysts.
Imports of unwrought copper totalled 510,402 tonnes last month, higher than 410,541 tonnes in October but still down 9.1% from a year earlier.
Copper imports in the first 11 months of 2021 were down 19.9% on the year at 4.94 million tonnes. 2021’s figure will fall far short of 2020’s record imports of 6.68 million tonnes.
Arrivals of copper concentrate, or partially processed ore, totalled 2.19 million tonnes in November. That was the highest since at least December 2007, according to Reuters and up 21.9% from 1.797 million tonnes in October.
China’s exports of unwrought aluminium and products were 509,318.50 tonnes in November, the highest level since March, 2020 and up 6.2% from October. Year to date, exports are up more than 20% from 2020.
That was the highest level since March 2020, and up 6.2% from 479,559.10 tonnes in October and up 20.1% on the year.
China’s soybean imports rose sharply in November from October, with 8.57 million tonnes last month, up 68% from October’s figure of 5.11 million.
China’s November soybean imports were down from 9.59 million tonnes in the corresponding month in 2020.
China brought in 87.65 million tonnes of soybeans in the first 11 months of the year, down 5.5% from the same period of 2020.