China’s June commodities imports show softer tinge amid slowing economic growth fear, says ANZ Research

China’s commodities imports for June have shown a softer tinge amid slowing economic growth fear. Imports in H1 2019 still signalled firmer demand for some of the commodities. Although Chinese stimulatory measures is expected to support the commodity imports in H2, further trade tensions remain a downside risk for demand, according to the latest report from ANZ Research.

Crude oil imports retreated further for the second consecutive month amid weaker margins and extended maintenance period. However, year-to-date numbers still look impressive. We believe additional crude oil quota to private refiners should keep the imports upbeat in H2 2019.

Natural gas growth rates stalled due to higher inventories, while coal imports stayed relatively high. This could invoke more restrictive quotas in H2 2019. Copper imports fell more than expected as several smelters remained closed for maintenance, the report added.

While maintenance shutdowns at several smelters have had an impact, weak manufacturing activity is also likely to have played its part in the fall in imports.

"Iron ore imports tumbled following a recovery in May amid rising prices and narrowing steel margins. Tightening environmental regulations for steel mills in China as well as higher prices can limit the imports in the months ahead," ANZ Research further commented in the report.