China’s oil imports reach record high levels in December, metal imports remain strong

China’s December commodity imports broke new records for crude oil, whereas the 2016 totals for iron ore and copper came in the highest on record. The wide liftoff in commodity consumption underpins recent PMIs results of above-average growth, consistent with a Chinese economy surpassing expectations of a slowdown in the second half of 2016.

Imports of crude oil reached record levels in December. Imports rose 755 kb/d year-on-year or 9.6 percent to 8/6 million barrels per day in December. This was driven by robust domestic demand, a push from independent refiners to reach their allotted yearly import quotas, and falling domestic production, noted Barclays.

China’s refiners shipped in 7.6 mb/d of crude oil in 2016, a rise of 13 percent year-on-year. Platts showed that 14 independent refiners gave applications for a total 30.89 mmt of crude oil imports quotas for this year; however, it is unlikely that the total volume would be granted. Many independent refiners recently got 2017 oil import quotas; however, their allotted quantities were based off volumes imported in January to October 2016.

Meanwhile, copper ore and concentrate imports fell 90kt to 1,670kt in December. The sequential fall of 5.1 percent in copper concentrate imports is not alarming, given that the data for December still represents a rise of 13 percent year-on-year. Total ore and concentrate imports came in at 17,058kt, a rise of 28 percent year-on-year from 13,319 recorded in 2015. Unwrought copper and semi imports also increased, growing 29 percent sequentially but declining slightly by 7.7 percent year-on-year.

“The strong level of copper ore and concentrate imports is being driven by continued expansion of China’s copper refining and smelting capacity, forecasted to rise to just under 8mnt of refined production in 2016”, added Barclays.