Chinese copper and crude oil imports rise
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China reported strong imports of crude oil and copper in January, the latest in a series of upbeat data that have propelled the price of several commodities to their highest in months.
China is the world’s biggest consumer of many commodities, including copper, cotton and iron ore, and analysts and investors watch its trade data for signals about demand trends.
While some investors are fretting about a collapse in the Chinese housing market and a “hard landing” for the country’s economy, many commodity traders are becoming increasingly optimistic about the prospects for demand as a government-induced credit crunch that had weighed on buying is coming to an end.
Rio Tinto, one of the world’s largest mining companies, said on Thursday: “Chinese growth during 2012 is expected to remain robust – averaging in excess of 8 per cent with a stronger second half than first.”
The miner said the easing of credit restrictions and Beijing’s programme of infrastructure spending would support the economy. It added: “We would expect that authorities would be prepared to take further action to stimulate economic activity should growth unexpectedly dip below 8 per cent.”
The import data showed a strong increase compared with a year earlier, following on from several months of heavy buying among Chinese traders as they took advantage of a fall in prices. Analysts, however, had expected a significant drop in January due to the lunar new year holiday.
This year, Chinese New Year fell a week earlier than last year, resulting in five fewer working days last month than in January 2011.
China’s copper imports were 413,964 tonnes, according to preliminary customs data, an increase of 13.6 per cent from January 2011. While imports were down 18.7 per cent from December’s record high, analysts said they were surprisingly strong for the new year period.
Crude oil imports were 23.4m tonnes, equivalent to 5.5m barrels a day, according to FT calculations, compared to an average of 5.1m barrels a day last year.
Imports of iron ore, however, a key steelmaking ingredient, fell 13.9 per cent compared to the previous year and 7.3 per cent from the previous month. Chinese steelmakers have been complaining of low demand because of slowing activity in China’s construction sector – a big consumer of steel.
The strength of China’s imports is one factor supporting oil prices, which this week rallied with Brent, the benchmark, hitting a six-month high of $118.79 a barrel on Thursday. In euro terms, Brent rose to its highest since July 2008.
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