China’s demand for commodities picked up in November with the world’s largest consumer of raw materials boosting imports of copper, crude oil, soyabeans and steel-making ingredient iron ore.
Shipments of copper hit 470,000 tonnes, up 42 per cent from October, while imports of crude oil hit 9.04m barrels per day – their second highest recorded level – and 94.54m tonnes of iron ore arrived in the country, up from 79.5m the previous month. Soyabeans imports were 8.68m tonnes versus 5.86m in October.
The stronger-than-expected import data should help provide a prop to commodity prices, which have been rattled hard by concerns about slowing economic growth in China, said traders. Copper in particular has been hit hard, falling 6 per cent over the past 10 days to $6,500 a tonne.
“The rise [in imports] backs up our view that a tightening copper-concentrate market is pushing many buyers into the refined market to satisfy its copper units,” said analysts at ANZ, adding that China’s oil imports should also allay concerns about weak demand. Iron ore prices recently rose 3 per cent to $68.4 a tonne.
China’s commodity buying typically picks up in November after weakening in October due to a week-long public holiday. The slowdown was particularly pronounced this year because of the Communist party congress. As such, other analysts said it was important not to read too much into the data.
On Thursday, China’s second largest copper smelter, Tongling Nonferrous, said it was idling 20 to 30 per cent of its smelting capacity in Anhui province, as part of China’s winter pollution crackdown, which has also impacted steel and aluminium production.
Australian miners were higher on Monday after Chinese trade data smashed expectations last week.
The ASX 300 Metals & Mining index was up as much as 0.8 per cent in early trading with gold and iron miners both gaining. Among the bigger companies, gold miner Evolution Mining was up 1.7 per cent and iron giant Fortescue Metals Group added 1.4 per cent.
The energy segment was also higher, with oil producers Woodside Petroleum and Santos up 1 per cent and 0.9 per cent, respectively.
Source: FT.com
