LAUNCESTON, Australia, June 9 (Reuters) – China’s exports
and imports turned in a robust performance in May, both rising
by more than expected and sparking hopes that the world’s
second-largest economy is emerging from its self-imposed
zero-COVID hibernation.
But it’s important, especially when assessing the strength
of imports, to make the distinction between the value and the
volumes.
The dollar value of imports in May gained by 4.1% from a
year earlier, beating expectations for a rise of 2.0% and
marking the first increase in three months.
China’s most significant imports are natural resources, and
while May arrivals of major commodities did show some
improvement for most, the performance was far more muted in
volume terms compared to the gain in the dollar value.
Crude oil imports were 46.1 million tonnes, equivalent to
about 10.86 million barrels per day (bpd), according to
calculations based on customs data for the first five months of
2022.
May imports were only marginally higher than April’s 10.47
million bpd and crude arrivals for the first five months of the
year are down 1.7% on the same period in 2021.
It’s worth noting that May’s crude imports would have been
the first month to start showing the impact of Russia’s Feb. 24
invasion of Ukraine, which boosted crude prices to the highest
in 14 years and saw Brent futures reach almost $140 a
barrel on March 7.
High crude prices likely deterred Chinese refiners from
rebuilding inventories, although it’s likely that the world’s
biggest crude importer will increase purchases in coming months,
partly because the economy is reopening after a series of
COVID-19 shutdowns in several cities and partly because Russian
crude is being sold at steep discounts.
Looking at other energy commodities, there were soft
outcomes in coal and natural gas in May.
Coal imports were 20.55 million tonnes, down from 23.55
million in April and in line with the 21.04 million from May
last year.
Imports in the first five months were 95.96 million tonnes,
down 13.6% from the same period in 2021, reflecting stronger
domestic output and the impact of high seaborne prices curbing
appetite for imported fuel.
Natural gas imports via both pipelines and as liquefied
natural gas (LNG) were 9.04 million tonnes in May, up from
April’s 8.09 million but down from 10.32 million in May 2021.
For the first five months of 2022, natural gas imports were
9.3% below the level for the same period a year earlier.
BETTER METALS
For signs of strength in imports of major commodities, it
was better to look at metals, with iron ore imports at 92.62
million tonnes in May, up from 86.06 million in April and 89.79
million in May last year.
It was the strongest month for the steel raw material since
January, although imports are still down 5.1% in the first five
months of the year.
There are expectations that the world’s biggest buyer of
iron ore will continue to ramp up purchases as part of efforts
to stimulate the economy through boosting spending on
infrastructure, construction and manufacturing.
The same dynamic was at play with imports of unwrought
copper, which were about 460,000 tonnes in May, slightly below
470,000 in April, but above the 450,000 from May 2021.
For January-May unwrought copper imports were 1.6% higher,
and while this is hardly a stellar performance, it is the only
major commodity that is in positive territory so far this year.
Overall, May’s imports of major commodities in volume terms
do provide some hope that the worst is over for the Chinese
economy and an acceleration is possible in coming months.
But much will depend on Beijing’s success in maintaining its
zero-COVID policy without widespread lockdowns, as well as
hoping exports hold up despite the global economy battling high
energy prices and rising inflation.
(Editing by Kim Coghill)
