January 13, 2016 / 7:57 AM / 4 years ago

China commodities imports jump, but 2016 outlook mixed

BEIJING (Reuters) - China’s commodity imports surged in December as tumbling prices spurred opportunistic buying, but shipments of some commodities are expected to start tapering off this year as slower economic growth checks demand.

Shipping containers are being loaded onto a cargo ship at a port in Lianyungang, Jiangsu province, China, January 13, 2016. REUTERS/China Daily

For calendar year 2015, imports of oil, iron ore and soybeans all hit record volumes, while copper was steady, customs data showed on Wednesday. Coal was the exception, with imports plummeting as a domestic glut slashed local prices and demand fell.

China’s total trade in December shrank much less than expected, but still likely consigned the economy to its weakest annual growth in 25 years.

The world’s second biggest importer of crude and top buyer of copper, coal, iron ore and soybeans is also seeing shifts in demand as policy makers try to focus on consumer-led growth and bring in environmental curbs.

Crude oil imports surged 9 percent in 2015 as prices slumped, boosted by strategic stockpiling and a relaxation of controls on crude imports and refined fuel exports.

China added up to 147 million barrels to its oil reserves in the first 11 months of 2015, according to Reuters calculations, and could expand purchases this year as new storage tanks become available.

“We could see China’s crude oil imports maintain robust growth similar to 2015,” said Wu Kang, vice chairman of energy consultancy FGE.

Soybean imports are also expected to gain in 2016 after jumping more than 14 percent in 2015, reflecting strong demand for soymeal, a key ingredient in animal feed production.

SHAKY OUTLOOK

But shipments of iron ore could start to slip this year, analysts said, as slower economic growth and worries about a depreciating yuan temper demand.

Coal also looks set for another sharp fall, hurt by state efforts to cut pollution and a slump in domestic prices that has eroded the price advantage of imported coal.

“Imports will probably fall another 10 percent in 2016 and we certainly don’t expect to see any improvement,” said Helen Lau, an analyst at Argonaut Securities in Hong Kong.

Iron ore shipments surged 17 percent in December to close out the year with a small rise as a slump in prices helped big miners in Australia and Brazil take local market share.

“Iron ore imports could fall slightly, as steel production in China will drop, while traders will also be reluctant to import iron ore due to the bearish outlook on iron ore prices,” Wang Yilin, an analyst at Sinosteel Futures in Beijing.

Copper imports came in close to the record seen in 2014, dipping just 0.3 percent on the year, although the total dollar value of imports fell 18.4 percent.

Analysts were divided on the outlook for the metal, with some December purchases likely brought forward due to low spot prices.

“There’s certainly been some price-induced buying emerge,” Daniel Hynes, an analyst at ANZ Bank in Sydney, said. “But I don’t think we’ve seen peak copper demand.”

(This version of the story has been refiled to correct spelling of “commodities” in headline)

Reporting By China Commodities & Energy Team; Writing By Adam Rose; Editing by Richard Pullin

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