China, the world's top buyer of iron ore, coal and soybeans, saw imports of those commodities fall sharply in August from the previous month amid slackening demand and abundant supply, while rapidly falling prices also kept buyers on the sidelines. But a steadying in copper shipments and a second monthly gain in crude oil shipments were bright points in the deluge of data, with recovery in shipments of the red metal suggesting that the worst of the fallout from a suspected financing scandal at Qingdao Port was over.
China imported 74.88 million tonnes of iron ore in August, down 9.3 percent from the previous month, official data from General Administration of Customs of China showed on Monday. Net steel product exports dropped 3.7 percent during the period. The fall in iron ore shipments came amid large-scale steel mills slashing their daily output by 8.35 percent in late-August to the lowest rate since March, pressuring prices of the steel-making ingredient to slump to their lowest in nearly five years.
"You tend to find that the Chinese steel mills coming off the leaner construction season will be slower in the seaborne market," said Mark Pervan, head of research at ANZ Banking Group. "This year though, you've probably got the additional motivation of steel mills trying to continue to keep prices low, so they're really trying to stay away from the seaborne market to keep prices from recovering." Meanwhile, China's coal imports fell 18.1 percent from a month ago to 18.86 million tonnes in August, soybean imports also tumbled 19.3 percent to 6.03 million tonnes, the customs office said.
China's coal consumption has been hit by a combination of slower economic growth, increased hydropower output and Beijing's fight against pollution, causing prices to slump to a six-year low. Similarly, the demand for soy imports has also been hit by tepid demand from the livestock and food processing sector on the back of the economic slowdown.
Headline trade data showed China's exports rose more than forecast in August while imports unexpectedly fell, pushing the trade surplus to a record high for the second consecutive month and underlining the challenges facing policymakers as they struggle to revive tepid domestic demand. China imported 25.19 million tonnes of crude oil in August, up 6 percent from the previous month and 17.5 percent from a year ago. Imports of copper finally steadied after three consecutive months of decline to reach 340,000 tonnes in August, unchanged from July.