Crude oil imports fell 11.5 percent from a year ago to their lowest in eight months, while aluminum dropped about 14 percent, iron ore was down 4.3 percent and soybean shed 5.7 percent from May.
On the whole, the nation’s imports grew a surprisingly weak 19.3 percent in June from a year earlier, slowing from the 28.4 percent pace in May, adding to a growing list of evidence that the tighter monetary policy has begun to bite.
Analysts said there was no reason to sound alarm bells yet, as the fall in crude imports was largely due to a heavy maintenance program and the overall import numbers for other commodities were still proving resilient.
June is also traditionally a period of seasonal demand lull due to widespread power shortages and rationing across the country.
“The fall in crude imports was quite a surprise but the overall numbers are still looking pretty decent. One has to take into account that some of the pullback we’re seeing in oil and other commodities has come after months of successive gains,” said an Australia-based analyst who declined to be identified due to company policy.
Looking ahead, analysts mostly believe that China’s commodity demand will rebound in the second half as the country kicks off a massive social housing program, although that would also depend on whether Beijing tightens its monetary policy further.
China has raised rates five times since October, alongside nine increases in the required reserve ratio for banks. Several economists think Beijing is near the end of its policy tightening.
Copper imports in China, the world’s leading copper and aluminum consumer, snapped two months of decline to rise 9.9 percent to 280,009 tons in June, data showed.
From a year ago, however, June’s volumes were still down 14.7 percent and total copper imports of 1.7 million tons for the first six months of 2011 remains down 23.8 percent from a year earlier.
“June’s arbitrage ratios were attractive for imports,” Zhuo Guiqiu, an analyst at Minmetals Futures said, adding that some of the imports may have been delivered from the LME warehouses in Singapore and South Korea, the nearest LME warehouses to China.
“Demand was not bad in June and should be able to absorb increased imports.”
Zhuo said he expected imports in July to be flat or fall slightly from June since the arbitrage between the cash LME and Shanghai copper contract turned around in the beginning of July.
Imports of unwrought aluminum, including primary, alloy and semi-finished aluminum products, fell by 13.9 percent to 64,491 tons. China had shipped in 74,880 tons in May.
“The spread between LME and Shanghai local prices lately does not support imports or exports into China. The Chinese market is in a supply-demand equilibrium now and people are waiting for international prices to fall much more before buying,” said CRU analyst Wan Ling.
After five months of surprisingly robust appetite, crude oil imports from China, the world’s second-largest consumer, finally lost ground and fell 11.5 from a year ago to 19.7 million tons, bringing total imports in the first half to 126.21 million tons.
The fall in yearly June imports marks the first decline since December and was the steepest since the 15.3 percent drop in November 2010.
Oil product imports rose marginally to 3.4 million tons.
The country’s leading refineries had cut their crude oil throughput in June by around 2.8 percent from May to the second-lowest daily volume in 15 months, as heavy maintenance and high oil costs dampen operating levels, a Reuters poll showed.
Data from the customs office showed that although the volume of China’s crude oil imports have only risen seven percent from a year ago, the surge in international oil prices had jacked up import costs by 42.5 percent.
