China's imports of most major commodities fell in October from month ago due to seasonal factors and a weaker economy, with copper the lone bright spark as trade gradually returned to normal after a financing scandal. The demand outlook for iron ore and coal for the rest of the year remains bleak, analysts said, as steel mills have started to cut output on continuing weakness in demand and the usual winter slowdown in use. Import tariffs on coal since October are also making overseas supplies uneconomic.
"The fall in bulk commodities is a reflection of tepid domestic demand, with the housing sector, a key economic driver, remaining weak," analysts at Minsheng Securities said in a research note. Other data released on Saturday also showed China's overall exports and imports slowed in October, reinforcing signs of fragility in the world's second-largest economy that could prompt policymakers to roll out more stimulus measures.
Copper imports climbed 2.6 percent in October from month ago to 400,000 tonnes, beating expectations that it would fall due to the week-long holiday early in the month, data from the General Administration of Customs showed. This is also the first time since April that copper arrivals broke out of the 300,000 range, as a high profile $1.2 billion financing scam at Qingdao Port in China sent shockwaves through the global base metals market and prompted some big banks to temporarily halt financing deals.
China's crude oil imports in October were 24.09 million, or 5.67 million barrels per day - down 15.5 percent on a daily basis from the previous month but still up 2.25 percent from year ago. Total imports in the first 10 months were up 9.2 percent from year ago at 252.6 million tonnes. The decline in imports came despite a near 10 percent fall in global oil prices during the month that dragged London Brent crude to a four-year low.
Market participants had expected China to seize the fall in prices to continue with its strategic stockpiling programme, after a similar plummeting of oil prices in September sparked a surge in shipments for September arrivals to reach its second highest on record on a daily basis. Still, analysts said any rise in October bookings may be reflected in the following month due to shipping schedules. China, the world's largest oil importer, was also a net exporter of refined oil products, with exports exceeding imports by 0.86 million tonnes in October.
Iron ore shipments fell 6.3 percent from the previous month's high to 79.39 million tonnes in October, as mills cut output due to capacity closures aimed at cutting smog during the Asia-Pacific Economic Co-operation summit in Beijing, and also in anticipation of the usual winter slowdown in steel use. Although the continuing drop in iron ore price - now at its lowest since 2009 - has forced high-cost Chinese mines to shut and led to more reliance on foreign supplies, abundant stockpiles at ports and tighter access to credit have discouraged mills to replenish aggressively.
Total iron ore imports in the first 10 months were up 16.5 percent at 778.4 million tonnes, while export of steel products have jumped 42 percent in the same period. Separately, coal imports fell 5 percent on month and plummeted nearly 22 percent from year ago to 20.13 million tonnes in October, after Beijing rolled out import tariffs to protect ailing domestic miners.
Total coal imports from January to October have already fallen 7.7 percent from year ago and some traders expect shipments in the coming months to drop further, causing 2014 imports to fall at least 10 percent. Imports of soyabeans from the world's top buyer fell 18.5 percent from month ago to 4.10 million tonnes, as shipments from South America come to an end while those from the US have not yet arrived.
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