| SHANGHAI, March 8
SHANGHAI, March 8 China's imports of major
commodities posted strong double-digit gains in February from a
year earlier, official data showed on Saturday, illustrating
apparently vibrant demand even though underlying consumption has
In a sign that the world's second-largest economy is
slowing, strong imports in the first two months of the year have
led to rising inventories. The price of industrial commodities,
such as copper, iron ore and steel, have also steadily fallen
through February, with the latter two slumping to their contract
lows this week.
At the same time, headline trade data showed China's exports
in February tumbled 18.1 percent from a year earlier, raising
questions about the health of the top commodity buyer despite
officials blaming Lunar New Year holidays for the unexpected
Analysts said the strong imports in the past two months were
largely driven by temporary factors such as financing demand and
stockbuilding, but credit conditions have eased significantly
With underlying demand faltering on the back of an economic
slowdown, China's commodity import demand could shrivel up in
coming months as end-users draw down swollen inventories.
"The risk is that the China commodity import feast may turn
to famine quite soon," Barclays Research said in a report.
Compared to a month ago, imports of crude oil, copper, iron
ore and soy in February all fell from record highs struck the
previous month, with analysts blaming seasonal distortions on
the Lunar New Year holiday when factories close for extended
Crude oil imports in February rose 10.97 percent from a year
earlier to 23.06 million tonnes, or 6.01 million barrels per day
(bpd), according to Reuters calculations based on aggregated
Jan-Feb figures given by the customs office.
Arrivals of unwrought copper, of which China is the world's
top buyer, rose 27.1 percent in February from a year ago to
379,000 tonnes. But imports were down about 30 percent.
"The fall was partly due to the holiday but the price
differential (between imports and domestic prices) was also
bad," Wu Jianguo, an analyst at Maike Futures, said.
He added that Chinese buyers were currently having little
appetite for spot copper imports because of low domestic prices
, which have already dropped 10 percent this year.
Iron ore shipments rose 11.9 percent in February from a year
earlier to 63.16 million tonnes, but tumbled 37.5 percent from
the record high in January.
Soybean shipments stood at 4.81 million tonnes in February,
up 65.8 percent from a year ago.
While arrivals would continue to rise in coming months due
to big orders of Brazilian corn signed previously, analysts
warned that sagging domestic consumption was already prompting
crushers to cancel shipments.
"Domestic demand is not very good right now. Bird flu
outbreaks have led to lower soybean sales, so crushers are
facing growing soymeal stocks. More crushers have begun to shut
their operations," said Li Lifeng, an analyst with an industry
Negative crushing margins have prompted buyers to cancel
245,000 tonnes of U.S. soybeans for delivery in the 2013/14
marketing year, according to the U.S. Department of
Recent economic data has been mixed, and the Lunar New Year
holiday has made it harder to assess momentum. Weak investment
and declining purchasers' manufacturing index (PMI) readings
have been countered by surprisingly buoyant exports and bank
At the annual parliament meeting this week, China sent its
strongest signal yet that its days of chasing breakneck economic
growth were over, promising to wage war on pollution and reduce
the pace of investment to a decade low as it pursues more
Premier Li Keqiang said China aimed to expand its economy by
7.5 percent this year, the highest among the world's major
powers, although the government also said that the target was
flexible as long as enough jobs were created.
(1 Tonne=7.3 barrel)
(Additional reporting by Polly Yam and Niu Shuping; Editing by