(Repeats item published earlier with no changes in text. The opinions expressed here are those of the author, a columnist for Reuters.)
By Clyde Russell
LAUNCESTON, Australia, March 10 (Reuters) - Amid the carnage of Monday’s crude oil and equity markets routs, news of China’s relatively robust imports of major commodities in the first two months of the year went under the radar but perhaps should have garnered attention.
The strength in China’s commodity imports came even as Beijing shut down large parts of the economy and quarantined millions of people in its battle to contain the coronavirus epidemic that has killed more than 3,100 people and infected more than 80,000 in the world’s most populous nation.
Official customs data released on March 7 showed crude oil imports averaged 10.48 million barrels per day (bpd) in the first two months, up 5.2% from the same period last year.
There was similar resilience in imports of iron ore. They stood at 176.8 million tonnes in the first two months, up 1.5% from the same period in 2019, while coal imports surged 33.1% to 68.1 million tonnes.
Imports of unwrought copper were 7.2% higher in the first two months at 846,106 tonnes, although overseas purchases of copper ores and concentrates did decline by 1.2% to 3.77 million tonnes.
Natural gas imports from both pipelines and liquefied natural gas (LNG) climbed 2.8% to 17.8 million tonnes - perhaps the most surprising performance given the reported deferral of several LNG cargoes in February because of the coronavirus, as well as weak demand from a warmer winter than usual.
It could be argued that the worst impact from the coronavirus is still to be felt: The bulk of commodity arrivals in February would have been arranged prior to the coronavirus turning into a major epidemic, which happened toward the end of January when the epicentre of Wuhan was quarantined.
There are also factors beyond the coronavirus that may influence volumes of China’s commodity imports in March and the coming months.
For example, crude import demand may be lower in March as several refineries undertake routine maintenance, while LNG demand usually slows as the peak winter period passes.
Coal imports may also soften after a bumper January and February, and as winter demand eases.
Iron ore is currently interesting. Imports in the first two months were relatively strong, especially given weather-related supply disruptions in both the world’s biggest exporters, Australia and Brazil.
This raises the possibility of rising import demand in March and April, though growth could be tempered by weakness stemming from the economic slowdown caused by the coronavirus.
Certainly, early indications from Refinitiv vessel-tracking and port data suggest a tapering in China’s commodity imports in March.
Filtered to show only vessels that have discharged cargoes, the first nine days of March saw slower rates of offloading than in the first two months of the year.
A total of 19.7 million tonnes of iron ore was discharged in the first nine days, which would translate into only about 68 million tonnes for the whole of March. However, the Refinitiv data does tend to be revised upwards with more cargoes assessed as the month progresses.
A similar pattern is currently showing for crude oil, LNG and coal, although it’s too early to conclude whether the vessel-tracking data is pointing to a sharp drop in commodity volumes, or something more modest.
One interesting sub-plot to the coronavirus and China’s commodity purchases is that there is absolutely no sign of any impact of the trade deal with the United States to dramatically increase imports of U.S. energy.
China didn’t import any U.S. crude oil in February and only two cargoes carrying a mere 4.05 million barrels are due to arrive this month, dropping to two tankers carrying 3.06 million barrels in April.
For LNG, one U.S. cargo was offloaded in February and a further single vessel in March. Refinitiv data shows no more cargoes booked or currently under way.
In coal, one ship carrying about 69,000 tonnes of coal is due to arrive in March from the United States, with none in February.
This means that in the first quarter of 2020, China’s imports of U.S. energy products will be a mere trickle, making the Jan. 15 deal’s full-year target of energy imports to the value of $27.6 billion extremely difficult to achieve, if not downright impossible. (Editing by Kenneth Maxwell)