China’s strong imports raise questions on weak economic outlook

China’s imports of major commodities continued resilient in September, despite all the discussion that insisted that the Chinese economy is struggling for momentum. Imports of crude oil, natural gas, coal, and iron ore dropped slightly from August, but all were higher than in September last year.

The first nine months of 2023 are showing strong growth over the same period in 2022, with crude oil imports up by 14.6%, natural gas by 8.2%, coal by 73.1%, and iron ore by 6.7%, according to customs data released on October 13. Copper imports were up in September from August, but down from the year earlier month.

For the first nine months of the year, unwrought copper imports were down 9.5% to 3.99 million metric tons. However, imports of copper ores and concentrates were up 7.8% over the same period to 20.34 million metric tons, which underscores the view that domestic production of refined metal has been increasing at the expense of imports.

Crude oil imports were 11.13 million barrels per day (bpd) in September, down from August’s 12.4 million bpd. September imports were up 14% from the same month last year, and arrivals in the first nine months were 11.34 million bpd, an increase of 14.6%. China’s refiners have ramped up processing rates in 2023, partly to meet increased domestic demand after the country ended its strict COVID-19 lockdowns, thereby boosting pent-up travel demand.

China has also boosted exports of refined fuels, with product shipments of 5.44 million metric tons in September, which equates to around 1.45 million bpd using the BP conversion factor of 8 barrels of refined fuels to each metric ton of crude.

While September’s exports of refined fuels were slightly down from August and the same month last year, shipments in the first nine months of the year are up 35.2% to around 1.4 million bpd. Fuel exports are likely to remain at robust levels given the availability of quotas for refiners and strong profit margins, particularly for diesel.