* Iron ore, coal, soy imports drop in Aug from mth before
* Analysts say falls set to continue
* Copper shipments steady, crude oil imports rise
* China steel mills have been slashing output
(Adds comment, detail)
By Fayen Wong
SHANGHAI, Sept 8 Chinese imports of iron ore and
coal dropped sharply in August from the month before amid
slackening demand and abundant supply, with rapidly falling
prices failing to stoke appetite in the world's top buyer of
A swift retreat in Chinese demand has already driven global
iron ore prices to near five-year lows and local coal prices to
their weakest in six, with analysts warning that the outlook for
shipments to the country remains grim in the wake of its
economic slowdown and festering oversupply.
But a steadying in copper shipments and a second monthly
gain in crude oil shipments were bright points in a deluge of
data issued on Monday, with a recovery in imports of the red
metal suggesting that the worst of the fallout from a suspected
financing scandal at Qingdao Port could be over.
"Import demand for commodities has slumped even on the back
of falling prices, reflecting soft domestic demand. The outlook
for the commodities sector remains weak in the face of the
economic slowdown," said Ren Zeping, an analyst at Guotai Junan
China's economy has had a bumpy ride this year. Growth
rebounded slightly in the second quarter from an 18-month low
thanks to a stream of government stimulus measures, but hopes
that the recovery would gain traction were dashed in July when
data showed activity was stumbling again.
The nation's appetite for commodities has also suffered on
the back of tightening credit, Beijing's war on pollution and
The second fall in China's August headline import growth
figures, which marked their worst performance in over a year,
has fueled speculation on whether authorities will loosen policy
further to revive local demand.
COAL, IRON ORE
Coal imports by China, which accounts for about a quarter of
global trade in the material, plummeted for the second month to
18.86 million tonnes in August, according to official data from
the General Administration of Customs of China. That was the
lowest since September 2012.
China's coal consumption has been hit by a combination of
slower economic growth, increased hydropower output and
Beijing's fight against pollution, causing local prices to slump
to a six-year low.
The around 18-percent monthly drop in August shipments was
exacerbated by fears Beijing would roll out policies to restrict
coal imports with high ash and high sulphur, as a way to aid
those on a growing list of loss-making miners.
"The uncertainly has put a chill on trade because it is like
having a sword swinging over one's head - you're afraid to move
because you don't know when the import curbs will come," said a
Shanghai-based trader. He declined to be identified as he was
not authorised to speak with media.
August iron ore imports declined just over 9 percent from
the previous month to hit a two-month low of 74.88 million
tonnes, as weakening steel demand has clashed with a flood of
Even though iron ore prices .IO62-CNI=SI are near a
five-year low after dropping nearly 38 percent this year, its
demand outlook remains murky as major Chinese steel mills have
started slashing output to cope with swollen inventories and
"Chinese steel mills, coming off the leaner construction
season, tend to be slower in the seaborne market," said Mark
Pervan, head of research at ANZ Banking Group.
"This year, 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, soy imports fell nearly 20 percent from July to
hit a three-month low of 6.03 million tonnes, hurt by lukewarm
demand from livestock and food processing sectors on the back of
the economic slowdown.
Analysts said imports could fall below 5 million tonnes in
September and October due to the end of the South American sales
CRUDE OIL, COPPER
China's crude oil imports rebounded from two months of
decline to mark 6.13 million barrels per day (bpd) in August, up
9.5 percent from a year ago.
The increase was partly driven by the return of PetroChina's
Lanzhou refinery after an overhaul, as well as robust gasoline
demand during the summer holiday season, analysts said.
Imports of copper steadied after three months of decline,
unchanged from July at 340,000 tonnes.
Fears of a metal financing fraud at Qingdao Port had rocked
the market in May, causing imports of the metal to dive to a
15-month low in July as banks either halted or reduced lending.
But analysts warned that imports would probably remain muted
in the coming months on the back of nagging worries about
potential losses from the financing fraud, with exposure from
major banks and trading houses having already surged to $1.2
(Additional reporting by China Commodities & Energy Desk,
Manolo Serapio Jr in Singapore; Editing by Joseph Radford)