OPEC’s July monthly oil market report stuck to the group’s forecast that China will lead global demand growth this year, with an increase of 760,000 bpd
China’s imports of major commodities continued to lose momentum in July, with crude oil arrivals slumping to the weakest in nearly two years, while those of iron ore, coal, copper and natural gas were largely steady.
The headline-grabber in Wednesday’s official data release was the drop in crude oil imports to 9.97 mn barrels per day in July, the lowest on a daily basis since September 2022.
China, the world’s biggest importer of crude, has seen arrivals slump this year, with imports of 10.90 mn bpd in the first seven months of the year, down 2.9 per cent from the 11.22 mn bpd over the same period in 2023.
Crude oil imports are down about 320,000 bpd in the first seven months of 2024, a figure that stands in sharp contrast to the demand growth forecasts from leading industry groups like the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).
OPEC’s July monthly oil market report stuck to the group’s forecast that China will lead global demand growth this year, with an increase of 760,000 bpd.
The IEA’s view on China is less optimistic, but the agency still expects China will account for about 40 per cent of this year’s global increase in crude demand, which equates to 388,000 bpd.
With China’s imports actually falling in the first seven months of the year, it would take an extraordinary turnaround for the remaining five for the OPEC and IEA forecasts to be realised.
With crude oil imports looking anaemic, it’s worth looking at imports of other major commodities.
At first glance the picture doesn’t necessarily look that weak, with imports of iron ore, coal, copper and natural gas all posting increases in July from the previous month.
But convert imports to a per-day basis, and July looks considerably less impressive.
Steady Imports
Iron ore imports were 102.81 mn metric tonnes, up 5 per cent to the 97.61 mn recorded in June, but on a daily basis July arrivals were 3.32 mn tonnes, just higher than June’s 3.25 mn.
They were also in line with the 3.29 mn tonnes per day from may, and down from the 3.39 mn in April.
The overall picture for China, which buys about three-quarters of global seaborne iron ore, is that imports of the key steel raw material are steady, with little variation in recent months.
This is despite the benchmark Singapore Exchange futures price trending lower since its high so far this year of $143.60 on Jan. 3, to the close of $102.66 on Tuesday.
Imports of unwrought copper showed a similar trend to iron ore, with July arrivals of 438,000 tonnes being just above the 436,000 in June.
But on a daily basis July’s arrivals were 14,130 tonnes, below the 14,530 from June.
For natural gas, imports of both liquefied natural gas and pipeline supplies in July were 10.86 mn tonnes, which is 350,300 tonnes per day, while June saw arrivals of 10.43 mn, or 347,700 per day.
In May, natural gas imports were 365,500 tonnes per day and in April they were 343,300 per day.
The one possible exception to the soft commodity imports is coal, where July imports of 46.21 mn tonnes were the highest since December.
But even with coal, the per day figures show a relatively steady pattern, with July’s 1.49 mn tonnes being the same as for June.
May’s coal imports were weaker at 1.41 mn tonnes per day, but April’s were stronger at 1.51 mn.
Putting the import data together shows that arrivals of iron ore, copper, natural gas and coal have been largely steady in recent months.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Aug 07 2024 | 6:55 PM IST