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Instant View: China commodity imports surge in July from a year earlier

(Reuters) - China’s imports of major commodities including crude oil, iron ore and soybeans all surged from a year earlier with the country snapping up raw materials as its economy revives following a hit from the coronavirus pandemic.

KEY POINTS:

*Crude oil: July imports rise 25% y/y to 51.29 mln T

*Iron ore: July imports rise 24% y/y to record 112.65 mln T

*Soybeans: July imports climb 17% y/y to 10.09 mln T

*Copper: July imports surge 81.5% y/y to record 762,211 T

*Coal: July imports fall 20.6% y/y to 26.10 million T

*Oil products: July exports fall 41.5% y/y to 3.21 million T

Preliminary table of commodity trade data <TRADE/CN>

Comment on Copper:

HE TIANYU, ANALYST, CRU:

“(The record high) is due to the continuously open arbitrage, which only closed around July 20. Demand was especially good in (the second quarter) because it was pushed back from (the first quarter). But I just visited some copper consumers in Jiangsu province and they say demand for refined copper is just so-so. Refined copper consumption in (the third quarter) could be lower on a quarterly basis.”

“Demand for copper from the air conditioning sector is good – production in July and August was better than expected.”

Comment on Iron Ore:

WU SHIPING, ANALYST, TIANFENG FUTURES:

“The jump in imports of iron ore mainly came from non-mainstream suppliers like Africa and India. Supplies of mainstream ores are still tight, especially from Brazil which is affected by the pandemic. Meanwhile, demand in China has been very strong to support the purchases.”

Comment on Soybeans:

XIE HUILAN, ANALYST, COFEED

“Brazil had record high soybean output this year, while the real depreciated. Brazilian beans were cheap and crush margins were great, so crushers made purchases very actively.”

Comment on oil product exports:

SENG YICK TEE, ANALYST, SIA ENERGY

“Exports are really depending on the relax of lockdown measures and recovery of economic activities. China’s domestic demand is still strong and margins are still high, whereas demand of major export destinations is weak. Some destinations are in their second waves of COVID-19, such as HK and Australia. And some Southeast Asia countries are still in lockdowns and their refineries are also slashing prices to keep the refinery running.”

LINKS:

For details, see the official Customs website (www.customs.gov.cn)

BACKGROUND:

China is the world’s biggest crude oil importer and top buyer of copper, coal, iron ore and soybeans.

Reporting by Asia Commodities and Energy team; Editing by Christian Schmollinger

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