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 Crude imports rose by than a fifth from a year ago to a record high,
while copper climbed for a second consecutive month to a three-month
high, official customs data showed on Thursday.
Soybean imports hit the highest this year, while iron ore was the
second-highest on record as coal imports also rose.
"Taken as a whole, the commodities import data shows demand has
improved slightly," said Helen Lau, a senior analyst at UOB-Kay Hian.
"But some of strength has been propped up by state stockpiling so it
doesn't indicate that there is a big recovery underway. The large
inventories for copper and iron ore are also going to pressure
imports in the coming months," Lau said.
Headline trade data showed China's overall imports and exports
returned to slight growth in April, beating market forecasts and
offering some positive signals for the world's second-largest
economy after a weaker-than-expected start to 2014.
Beijing has launched a series of mini-support measures, including
speeding up railway construction, approved tax breaks for small
companies and reduced fees for exporters to support a slowing
economy.
These measures, along with a seasonal pickup in construction and
manufacturing, have helped boost demand for raw materials and
encouraged traders to step up imports.
While increased scrutiny on import financing has raised concerns
that imports could be hit, analysts said any impact on copper and
iron ore demand would be marginal and temporary.
CRUDE OIL, COPPER
Crude imports from China, the world's top energy consumer, rose more
than a fifth in April from a year earlier to a record high of 6.78
million barrels per day (bpd), helped by higher seasonal demand and
indications of stockpiling.
As refineries cut production during the peak maintenance season, the
strong crude imports suggest some of the oil went straight into
storage, with two new strategic reserve sites in Tianjin and
Huangdao estimated to add 39 million barrels of storage capacity.
"SPR (Strategic Petroleum Reserves) fill may have already accounted
for an average of 260 kilobarrels per day in Q1, and could remain
buoyant as China could add a total of 58 million barrels of SPR this
year," Sijin Cheng, an analyst at Barclays Research said in a note.
Chen said a budget of the State Reserves Bureau published last month
showed a doubling of security costs attributed to newly completed
oil reserve sites, which indirectly confirmed the capacity addition.
For copper, imports by the world's top buyer rose 7.2 percent in
April from March to 450,0000 tonnes.
The rise could be linked to buying by China's stockpiler, the State
Reserves Bureau, said Zhou Jie, dealer and senior analyst at China
International Futures (Shanghai) Co Ltd.
"SRB buying has already pushed up (yuan) premiums in the domestic
market," Zhou said, adding that strong premiums for spot refined
copper could encourage importers to buy metal on the international
market this month to resell domestically.
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IRON ORE, COAL
China imported 83.39 million tonnes of iron ore in April, the second
highest monthly figure on record and up 12.75 percent from March,
driven by seasonal demand from Chinese steel mills for the raw
material.
Analysts said strong steel production in the world's top iron ore
consumer, along with a ramp up in production capacity at global
miners VALE , Rio Tinto and BHP Billiton should support imports in
coming months.
"The daunting issue for the market is that rising imports and
mounting inventories are not sustainable. But when iron ore prices
start to fall, someone then has to cut production and it will likely
be local Chinese producers," said Ivan Szpakowski, an analyst at
Citigroup Research.
Szpakowski estimated the recent fall in iron ore prices had already
cut 10 percent of China's domestic production, which has in turn
helped to offset rising imports.
China's total coal imports, including lignite, rose for the
second month in a row in April to hit 27.11 million tonnes, as
cheaper overseas prices encouraged traders to increase orders.
Total imports in the first four months of 2014 reached 111 million
tonnes, up 2.3 percent from year ago, data showed. However,
shipments were down 5.5 percent from a year earlier.
SOY
Imports of soybeans hit their highest so far this year in April,
climbing 63.5 percent from year ago to 4.62 million tonnes.
However, a recent spate of defaults due to a domestic glut and heavy
losses suffered by local crushers could weigh on shipments in coming
months.
"All the cargoes that Chinese importers booked aggressively in the
past months are arriving now ... But this is creating a glut of
beans in the domestic market ... From June onwards imports should
start declining," said Vanessa Tan, an analyst at Phillip Futures in
Singapore.
(Additional reporting by China Commodities & Energy Team; Editing by
Ed Davies)
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