China, the world’s largest consumer of commodities, including copper and iron ore, registered strong growth in crude oil and copper imports in August, allaying fears of a slowdown in the country’s demand for materials.

The preliminary numbers, published on Friday by China’s customs bureau, are a closely watched barometer of demand.

Imports of crude oil increased 13.3 per cent in August from the year prior to 20.9m tonnes – more than expected after figures showing weak oil import demand in July.

Imports of copper jumped 16.7 per cent from a year earlier, continuing strong growth from the previous month thanks to demand from China’s expanding power grid.

The iron ore figures painted a more mixed picture, however. Imports fell to 44.6m tonnes in August, a drop of 13 per cent from the previous month and 10 per cent year-on-year. For the first eight months of this year, iron ore imports were virtually unchanged from the previous year, according to the customs data.

“China's demand for oil imports in the near-term will be supported by recent expansion of refinery capacity, although moderating industrial production could mean lower oil import growth levels in the second half,” wrote Jing Ulrich, chairman of China equities and commodities at JPMorgan, in an e-mail.

China is the world’s second-largest consumer of oil after the United States. Its oil imports have been rising because of consumer demand and Beijing’s efforts to fill strategic oil reserves.

He Wei, an analyst at Bocom International, said the oil import growth was driven by stagnant domestic production. “Domestic oil production hasn’t grown that much this year whereas total demand for oil products has increased about 10 per cent, so the additional supply must come from imports.”

The government’s energy efficiency measures have led to mill closures and steel output fell during the month of August, according to China Iron and Steel Association. Chinese mills are also importing less ore due to sourcing more domestically.

“It’s a case of lack of availability,” said Ian Roper, commodities strategist at CLSA. “Because of China’s defaults last year the major iron ore suppliers are shipping to everyone else first and China is the last resort.”

China’s iron ore production is likely to reach 400m tonnes this year, up from 256m tonnes in 2009, Mr Roper said.

Soybean imports fell a modest 3.6 per cent in August from the month prior to 4.8m tonnes, mainly as a result of stockpiling during the summer months.

Nevertheless, “we expect China’s soybean imports could set a new record this year,” said Shen Zhendong, soft commodities analyst at Beijing Shihua International Financial Information.

“Soybean imports could reach 50m tonnes this year, as China’s demand for imported agricultural commodities is growing strongly.”

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