BEIJING (Reuters) - China’s commodity imports jumped again in December, pushing 2016 shipments of goods from crude to iron ore to record levels and boosting expectations that lower domestic output will help prolong the months-long buying binge.
For 2016, shipments of oil, iron ore, unwrought copper, copper concentrates and soybeans hit all-time highs, the General Administration of Customs said on Friday. Coal was the exception, but imports were still up by a quarter on a year ago.
Oil and soybeans also hit record monthly totals in December, while coal shipments were among the highest on record and iron ore notched up the third biggest volumes for the year.
The splurge helped spur stronger-than-expected imports for the world’s largest trading nation.
The data reflected a major recovery by the world’s second-largest economy, as hefty government spending in infrastructure fueled demand for base metals and steel, and Beijing’s efforts to clean up dirty industries like coal forced utilities to scramble for lower-priced supplies abroad.
Concerns linger that slowing economic growth in 2017 will temper demand and the first two months of the year will be weaker due to the Lunar New Year holiday at the end of this month.
But lower output of major products like crude and coal and buoyant domestic prices could prolong the boom.
Record oil imports of 8.56 million barrels per day (bpd) in December buoyed crude futures, with shipments expected to continue rising in 2017 as domestic output slows and Beijing issues more import quotas to independent refiners, known as teapots.
Their rapid expansion drove crude imports and, perhaps more worrying for their Asian refiners, forced the state-owned producers to sell a record amount of product abroad.
Seng Yick Tee, a researcher with consultancy SIA Energy, said he expected China’s crude imports to rise by 600,000 bpd in 2017, with teapots accounting for two-thirds of the increase.
Coal arrivals were up more than 50 percent from a year ago, the latest sign that government-enforced mine closures have forced utilities to buy from abroad.
If Beijing renews its effort to curb small, privately owned coal mines after the Lunar New Year, buying could exceed 2016 levels, traders said.
Iron ore arrivals are expected to remain strong into this year as steel mill demand stays firm, even as the government continues its crackdwon on inefficient capacity.
In 2016, 45 million tonnes of capacity was closed, but most of this was already idled.
“We’re forecasting crude steel production to rise about 1 percent and we’d expect Chinese demand for iron ore to increase at a similar level,” CLSA head of research Andrew Driscoll said.
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Reporting by Chen Aizhu, Josephine Mason, Meng Meng, Hallie Gu in BEIJING, Manolo Serapio in MANILA and Melanie Burton in SYDNEY; Editing by Richard Pullin