China’s commodities imports grew relatively strong in January as consumers restocked before the Chinese Lunar New Year holidays, noted ANZ in a research report. Given a surprisingly solid level of imports recorded in the prior month, it was not much of a surprise that the data for January recorded some sequential declines. But the solid year-on-year growth indicated that demand continued to be strong on a seasonal basis.
Imports of crude oil and coal stood out, rising 27.5 percent and 63.6 percent year-on-year respectively. Imports of iron ore also came in well, expanding 11.9 percent year-on-year. The only major commodity to have recorded some softness was copper, with imports of refined copper and products dropped 13.6 percent year-on-year to 380kt. This was eased by the strength seen in imports of copper concentrate that surged 6.8 percent.
Given the Lunar New Year holidays falling largely in February, imports are likely to be a tad lower in February. But that would be eased by the effect of certain supply side disruptions. As the Escondida copper mine is shutdown because of a wage dispute, buyers might increasingly revert to the refined copper market, stated ANZ. The unexpected rise in China’s overall exports indicates a rebound in regional trade in the supply chain that might augur well for commodity imports.
At 6:00 GMT the FxWirePro's Hourly Strength Index of Chinese yuan was neutral at -9.738, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -27.7126. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
