China has switched from driving global demand for major commodities to being a drag on growth, with July’s customs data confirming the weakening trend for imports of crude oil, iron ore and copper.
The exception to the trend was coal, but the sharp gain in July’s imports of the polluting fuel are more a result of China having to go the seaborne market because of domestic policies that curbed local output.
China, the world’s biggest importer of crude oil, brought in 41.24 million tonnes in July, equivalent to 9.71 million barrels per day (bpd), according to official customs data released on Aug. 7.
This was down from June’s 9.76 million bpd, slightly above May’s 9.65 million bpd, and below April’s 9.82 million bpd.
July was the fourth consecutive month that crude oil imports were below 10 million bpd, a far cry from most of 2020, when imports surged from May to November as refiners stocked up on crude bought cheaply at the height of the crash caused by the coronavirus pandemic and a brief price war between top exporters Saudi Arabia and Russia.
At that time imports rose as high as a record 12.94 million bpd in June last year, but apart from a brief spike higher in March this year, 2021 has been a story of declining crude purchases by China.
Crude imports for the first seven months of this year are 5.6% below that for the same period in 2020.
That percentage decline may accelerate in coming months given the strong imports in the second half of 2020 will give a higher base for comparison.
Imports of natural gas, both from pipelines and as liquefied natural gas (LNG), also declined in July to 9.34 million tonnes from June’s 10.21 million tonnes.
However, this is more likely related to a scarcity of available cargoes of spot LNG as demand for the super-chilled fuel soars across Asia to meet rising electricity consumption during the summer air-conditioning peak.
Among metals, iron ore imports fell for a fourth consecutive month, with 88.51 million tonnes of the steel raw material arriving in July, down from 89.42 million in June and some 21% below the record of 122.65 million from July last year.
Imports for the first seven months of the year are now 1.5% below the same period last year.