The detailed release of China's commodity trade data for July shows a
positive recovery across the board in line with better-than-expected
economic data over the past couple of months. Most commodities
recorded a strong rise in imports from the previous month, although
there was some weakness on a seasonal basis.
The improvement in import demand
and strong rise in domestic
production have resulted in many
commodities recording positive
growth in apparent consumption.
This is backed by selective stimulus in
China in commodity-intensive
markets, which should support
commodity prices in coming weeks.
|China commodity trade data|
Copper and zinc demand up
As expected, primary copper imports
rose 7.2% mom to 352kt, and were
also up 13.5% yoy. This was driven
mainly by import arbitrage, but we
also saw seasonally strong demand.
Zinc concentrate imports continue to
recover, rising 78% yoy to 197kt.
While refined zinc imports fell 2%
mom to 39.5kt, combined with strong
production (+23% yoy to 452kt),
apparent consumption rose 13% yoy
in July, reflecting improving
Tin imports collapse
China imported 1.2kt of refined tin
and alloys in July, down 63% yoy.
With exports falling to 0.1kt and
refined output reaching 12.5kt,
apparent consumption was 13.6kt,
down 12% yoy.
The weak import
number was due to the collapse in
Indonesian exports as a result of new
purity rules. With these rules coming
at a time when demand in China is
picking up, we would not be surprised
if prices threatened this level in the
not too distant future.
Energy demand strong
On the energy side, imports of crude
oil grew strongly, up 20% yoy to
26.1Mt. Apparent consumption was
up 6.7% yoy although this moderated
slightly from last month as refinery
runs eased. Thermal coal imports
picked up from the lull in June, rising
38% mom to 32.8Mt.
This pick-up in demand is in line with
macro indicators showing signs of
. These include electricity
generation, which grew 8.1% yoy and
industrial production, which was up
9.7% yoy. (Read Report)
Source : CIMB Research
Labels: China, Commodity, Equity Strategy