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China’s commodities imports to show rebound in November

Date 07-December-2013
Subject China’s commodities imports to show rebound in November

China is expected to post an increase in imports of major commodities in November compared with the preceding month, helped by stock building ahead of winter and after a week-long holiday disrupted shipments in October.

Imports are not expected, however, to reach the highs hit in September, when iron ore and crude oil deliveries were at a record, while copper purchases were the highest in 18 months. The strong numbers were largely due to buyers purchasing to cover the public holidays in the first week of October.

Preliminary trade data is due out on Sunday between 0200 and 0300 GMT.

China’s economic recovery may have lost a little momentum in November, with factory output growth seen slipping to a four-month low of 10.1 percent in annual terms, according to the median forecast from 22 analysts, from October’s 10.3 percent.

However, export growth is expected to quicken to a three-month high of 7.1 percent from a year earlier, up from October’s 5.6 percent and a sign that external demand may be improving. CRUDE OIL

China’s crude oil imports in November are likely to have risen from a 13-month low in October as refineries restarted operations after maintenance.

Sinopec’s 400,000-barrels-per-day Maoming refinery in the southern province of Guangdong and the 240,000-bpd Fujian refinery in southeastern Fujian shut down from mid-October for 50-55 days of maintenance.

China’s crude oil imports in October dropped to a 13-month low of 20.41 million tonnes, coming off September’s record high.

Month Oct Sept Aug July Volume (mln T) 20.41 25.68 21.43 26.11 Volume (bpd) 4.81 6.25 5.05 6.15 IRON ORE

China’s iron ore imports in November are expected to rebound from October, with steel mills purchasing more as a result of an improving steel demand, driven by a more promising economic outlook.

Imports stood at 67.83 million tonnes in October, down 9 percent from the September record high of 74.58 million tonnes.

Chinese steel futures rose nearly 1 percent in November. Strong buying interest has driven spot iron ore prices up 3.4 percent during the month.

Iron ore exports to China from Australia’s Port Hedland, which handles about a fifth of the global seaborne market, rose 38 percent to 22.3 million tonnes in November from the same month last year in another sign of solid demand from the Asian giant. [ID: nL4N0JH3VF] China’s imports of the steelmaking raw material are expected to rise further in December as mills restock ahead of winter on when some domestic iron ore production shuts temporarily. Month Oct Sept Aug July

Volume (mln T) 67.83 74.58 69.01 73.14 COPPER

Arrivals of copper may have risen in November with investors importing refined copper as collateral for short-term loans increasing their spot purchases around September and contracted metal arriving in November, traders said.

Price differentials between domestic and London Metal Exchange prices had not been enough to finance imports last month, said Wu Jianguo, analyst at Maike Futures Brokerage. A growing cash crunch in the domestic market was also encouraging copper imports for financing. Wu estimated the arrivals in November would rise from October but would be lower than September.

Arrivals of anode, refined metal, alloy and semi-finished copper products were 406,708 tonnes in October and 457,847 tonnes in September which was 18-month high.

Month Oct Sept Aug July Volume (tonnes) 406,708 457,847 387,564 410,680 SOY

China’s soy imports in November are likely to rise to more than 6 million tonnes, up from 4.2 million tonnes in October, driven by good crushing margins and healthy demand ahead of the Lunar New Year, which falls at the end of January. Analysts expect December imports to rise further to nearly 7 million tonnes.

“Purchases by Chinese companies from the United States are far more than in the same period last year, triggering worries that China may have overbooked and some of the contracts in January may be cancelled,” said the China National Grain and Oils Information Center (CNGOIC).

Month Oct Sept Aug July Volume (mln T) 4.20 4.70 6.37 7.20

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