Choose your favorite. Russell: China's imports of commodities can be either solid or soft.
The markets often use data, such as China's imports for major commodities, to determine trends regarding the second largest economy in the world.
The July trade data is not very clear. It gives ammunition for both an economy that's resilient and recovering and another that's struggling to gain momentum.
Crude oil provides a good example.
Calculations based on data released Thursday show that China, the world's largest importer, received 11.11 million barrels of oil per day in July.
This was an increase of 11.5% or 1,14 million bpd from the 9,97 million bpd in July of last year.
If a negative view is desired, then July's imports fell by 5.4% or 1,03 million bpd from the 12.14 million in June. They were also at their lowest since January.
Prices are often overlooked when discussing the relative strength of imports.
China has become more price sensitive in recent years. It will increase imports, lift inventories, and reduce purchases when the prices rise too quickly or too much.
Brent futures reached a record high of $82.63 per barrel on January 15, the highest price so far in this year.
Oil imports increased in the second quarter, as prices declined. Brent briefly dropped below $60 per barrel in April and May.
Since then, prices have risen due to increased volatility caused by geopolitical events like Israel's conflict with Iran in June and threats from the European Union and U.S. president Donald Trump regarding Russian supplies.
It is possible that Chinese refiners will be cautious due to the higher prices and imports may ease.
The year-to date imports of crude oil, which have increased by a modest 2.8% to 11,25 million barrels per day, are perhaps the best indication of China's current demand.
The first half of this year saw a 1.3% increase in China's crude oil production. Also, the electrification and modernization of vehicles is reducing gasoline consumption.
China's overall crude oil demand is neither strong nor weak.
IRON ORE AND COPPER
Many other commodities are also important.
Imports of iron ore in July, at 104.62 millions metric tons, were down by 1.3% compared to June but up by 1.8% compared to July last year.
The imports of steel-making raw materials were down by 2.3% in the first seven month period, at 696.57 millions tons. This figure is in line with the slight decline in production in the first half.
Imports for July were 480,000 tons. This is up 3.5% compared to June, and 9.6% compared to July 2024. However, they are still 2.6% lower than the same period last year.
This is largely due to the uncertainty surrounding U.S. copper tariffs that drew the copper from China and into the United States during the first half.
This trade will likely reverse, as Trump has backed down from imposing a 50% tariff on imported refined copper. He is now limiting the tariff to only certain types of copper goods.
As U.S. copper imports will likely decline in the second quarter as stocks are depleted, Chinese buyers of the metal can import more.
Imports of coal increased slightly in July. Arrivals were 35.61 millions tons, a slight increase from the 33.04 million tons recorded in June, but a 23% decrease from July 2012.
China's imports of coal have fallen by 13% in the first seven month of this year as a result rising domestic production and lower coal-fired power generation.
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These are the views of a columnist who writes for The. Clarence Fernandez edited this article
(source: Reuters)
