China's commodity imports in January fell from December due to high inventories, lackluster downstream demand and the Lunar New Year holiday.
China's appetite for imports is generally a proxy for the state of its industrial health.
Analysts had widely expected the slowdown, which came after a restocking run late last year.
Iron ore imports had already begun slowing in December due to government curbs on the real estate sector, which consumes half of China's steel. Ore imports fell 7% on month in January to 59.3 million tons.
"Major mills, recognizing the gloomy market environment, rolled over their list prices from January to February... (and) the China Iron and Steel Association reported a climb in steel inventories during January," The Steel Index said in a report.
Iron ore stockpiles at Chinese ports have topped 100,000 metric tons, a record level.
Meanwhile, iron ore import prices for China delivery have remained steady around $145-$148/ton since early December, suggesting that Chinese mills aren't buying aggressively.
Chinese companies are likely to seek opportunities to buy iron ore at current prices, which are relatively low, said analysts, including those with Commerzbank.
Most major businesses in China closed for a week at the end of January for the Lunar New Year holiday.
China imported 413,964 tons of copper in January, a 19% decline from December's record, but a 14% increase on year.
"While Chinese imports of refined copper were very strong in the fourth quarter of 2011, weakening signals in the domestic market and the closure of the arbitrage window in 2012 suggest China has not been the predominant buyer of the material this year," Barclays Capital analyst Kate Tang said.
January's decline snaps a seven-month streak of rising imports of copper and copper products. Copper inventories at the Shanghai Futures Exchange have risen to around 180,000 tons--their highest level since May 2010.
China's soybean imports in January totaled 4.61 million tons, a 15% decline from December. The volume is in line the Ministry of Commerce's early-January forecast of 4.6 million tons.
Analysts attributed the decline in soybean imports to the Lunar New Year holiday.
The slump in imports helped to sharply expand China's January trade surplus, which rose to $27.3 billion from $16.5 billion in December.
Economists surveyed by Dow Jones Newswires had expected the surplus to fall to $10.6 billion.
Dow Jones Newswire |
