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China's imports of major commodities hiccup in May
LAUNCESTON, Australia, June 9 (Reuters) - China's imports of major commodities lost momentum in May, with crude oil, coal, iron ore and copper all recording declines amid concerns about growth in the world's second-biggest economy.
Only imports of natural gas showed any improvement, with May's 10.11 million metric tons slightly ahead of the 9.67 million in April, although they were still down 11% from a year earlier, according to customs data released on Tuesday.
Crude oil arrivals dropped to 10.97 million barrels per day (bpd) in May, down 6.2% from April's 11.69 million bpd and also below the 12.1 million bpd recorded for March, which was the strongest month since August 2023.
Iron ore imports slipped to 98.13 million tons in May from 103.14 million tons in April, and were also weaker than the 102.03 million from May last year.
Imports of all grades of coal were 36.04 million tons in May, down 4.7% from April's 37.83 million tons and 17.8% weaker than the 42.82 million tons in May 2024.
Unwrought copper imports were 427,000 tons in May, down 2.5% from the 438,000 tons in April and also below the 514,000 tons from the same month a year earlier.
On the surface the decline in imports of major commodities looks ominous for China as the world's biggest buyer of natural resources faces an ongoing trade war with the United States and still sluggish growth at home, especially in the key residential construction sector.
But there is always a risk of reading too much into monthly numbers, which can be quite volatile and are also often driven by price moves during the period when cargoes were arranged.
Crude oil is a good example of this.
China's imports were weak in January and February, with cargoes delivered in these two months having been bought against a backdrop of rising prices, with benchmark Brent futures rallying from early December to a peak of $82.63 a barrel on Jan. 15.
But oil prices started sliding thereafter, with Brent dropping to a low of $58.40 a barrel by April 9.
Therefore, the rebound in China's crude imports in March and April came amid a declining price trend when the cargoes would have been bought.
However, May cargoes would have been arranged when prices were once again trending higher.
It's also worth noting that China's imports of Russian and Iranian crude have also been volatile in recent months, dropping as new U.S. sanctions on vessels were imposed and then recovering as traders worked out ways around the measures.
This pattern seems likely to have continued, with commodity analysts Kpler estimating China's imports of Iranian oil at 743,500 bpd in May, but also forecasting a sharp rise to 1.48 million bpd in June.
Iron ore imports may also have been impacted by price moves, with the price rising modestly over April, the time when most May-arriving cargoes would have been booked.
The Singapore Exchange contract reached a recent high of $101.80 a ton on May 14, and has since moderated to end at $96.26 on June 6.
While the price moves are modest, the small decline may encourage some buying by China's steel mills, especially given the prevailing view that Beijing will launch new stimulus efforts in coming weeks to boost the economy.
Copper imports are also likely reflecting dynamics on global markets rather than the domestic situation in China.
China's imports have trended weaker and are now down 6.7% for the first five months of 2025 compared to the same period last year.
But physical copper has been shifting to the United States as market players expect President Donald Trump to impose a tariff on imports of the industrial metal.
U.S. demand has bolstered the premium of copper for delivery to the United States, and drawn metal away from China.
While the London price has been volatile and driven by news reports on what Trump may or may not do, the trend has been to higher prices, with an increase from an April 9 low of $8,105 a ton to $9,701 in early Asian trade on Monday.
Coal is the major commodity where China's domestic prices and supply have driven weakness in imports, with strong production and soft local prices cutting the need for imports.
Seaborne thermal coal prices have dropped to four-year lows in response, and there are some early signs that demand is picking up, but it will likely take further declines to spark any meaningful interest in boosting imports.
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(The views expressed here are those of the author, a columnist for Reuters.)
