Chinese Commodity Imports: A Record Year in 2009

by: Doug Hadfield

In a brief released by BMO Capital Markets on Tuesday, senior commodities analyst Bart Melek reported that Chinese trade statistics for December illustrate that 2009 was a remarkably bullish year for commodity imports. This is consistent with previous comments made by Melek in our recent video interview with him, in which he stated that China was coming “back to trend”, which is fundamental to long term global economic growth.

Copper imports rose 29% year on year to 369kt, leaving 2009 up 63% from the 2008 total. The reports concludes: “Any number ~300kt will be perceived as a tightening of conditions, so the December data is clearly bullish.”

The story is similar across the board. Iron ore imports jumped a sharp 80% year on year to 62Mt, just shy of the 64.5Mt September record. In 2009, iron ore imports rose 41% above 2008. Melek says the strength is reflected in the spot price, with Indian fines delivered into China currently at US$135/t.

While the steel sector continues to ramp up following severe cutbacks, downside price risks remain, as overcapacity vis-à-vis demand may weigh on the market should it be flooded with Chinese steel.

Oil imports into China, too, represent a new record of 156MMbbl up 48% year on year for a total increase of 14% from the previous year.

There is one negative in the brief: a 3% decline in aluminum imports from the previous month. This slight movement south is tempered by the very strong 70% year on year increase in aluminum imports, however, bringing the total up 164% over 2008.

Disclosure: No Positions