BEIJING (Reuters) - China’s imports of iron ore reached their highest level in 20 months in September as buyers took advantage of falling prices to replenish stocks, and copper and crude oil imports also rose, but the data did little to raise hopes that demand in the world’s second biggest economy was on track for a full recovery.
Figures from China’s General Administration of Customs on Saturday gave indications of renewed vigour in the world’s second largest economy, with total exports in September rising by a much faster than expected rate of 9.9 percent year on year, but the signals from a raft of commodities data were mixed.
Imports of iron ore rose 4.1 percent to 65.01 million tonnes, their highest level since January 2011, with steelmakers switching to cheaper imported materials rather than relying on inventories bought at higher prices.
Copper shipments rose 11 percent over the month mainly as a result of bookings made late last year, while crude oil hit 20.08 million tonnes, up 9.1 percent from the 22-month low of the previous month.
Favourable prices rather than stronger demand made foreign iron ore more attractive during September, traders said.
“The sharp decline in spot prices has encouraged some steel mills to use cheaper imported materials to lower production costs, but some mills have to fulfil long-term supply contracts,” said a trader in the coastal city of Rizhao.
The China Iron and Steel Association, which represents the country’s biggest steel mills, said on Thursday that despite the recent recovery in iron ore prices, the market remained weak.
“Because steel production has been falling for three consecutive months, there has been no fundamental change in iron ore oversupply, and there remains a certain amount of room for iron ore prices to decline in the coming period,” it said.
Analysts said the 11 percent rise in copper shipments to 394,837 tonnes was unlikely to reflect any revival in underlying demand.
Real refined copper consumption did not see a strong recovery and the increase can be attributed to the arrival of term shipments booked late last year, said Zhang Ao, analyst with Minmetals Futures.
“To a certain extent, consumption of refined copper could have fallen a bit last month because prices went up so fast in September, which made the price differentials between refined metal and scrap bigger. Some of the refined demand was replaced by scrap,” Zhang said.
Chinese importers may have booked 250,000-300,000 tonnes in refined copper term shipments per month for this year, traders estimated.
At 4.89 million barrels, crude oil imports were 12.8 percent higher on a daily basis than the 22-month low of 4.33 million bpd in August, but demand remains relatively weak and refineries in the world’s second largest oil consumer continue to undergo maintenance.
Top refiner Sinopec (0386.HK) lifted less crude oil from Saudi Arabia against their contract volumes for its August loading programs because of refinery maintenance, traders have said.
Crude imports from Iran could also stay low as Sinopec’s Tianjin refinery is expected to have stopped buying condensate from Iran’s South Pars field from July through September, partly because of a planned major plant overhaul.
Soybean imports in the world’s biggest consumer were much higher than expected, rising 12.4 percent month and month to 4.97 million tonnes.
Shipments increased despite high prices in the United States caused by drought, but low supplies are expected to lead to a decline in arrivals in October.
Reporting by David Stanway, Niu Shuping and Judy Hua in BEIJING, Ruby Lian in SHANGHAI, Polly Yam in HONG KONG' Editing by Michael Perry