China’s copper, diesel, and alumina exports soared in June compared to the same month of 2023, with copper exports surging to a record high as sluggish domestic demand amid weaker-than-expected economic growth is weighing on Chinese commodities consumption.
Last month, Chinese copper exports jumped by 187% to an all-time high, per official Chinese data reported by Bloomberg. Diesel exports soared by 180% as domestic demand is weak on the back of the property crisis with tepid demand in the construction sector and sluggish fuel demand in the country so far this summer.
In addition, alumina exports surged by 109% in June from a year earlier to the highest level in two years.
With exports of key commodities rising, signs are multiplying that China will need additional stimulus to get its economic growth and commodity demand back on the historical track of growth.
China’s commodity imports also suggest that the economy is weaker than previously thought.
Data from last week showed that China’s imports of crude oil slumped by 11% in June from a record high in the same month of 2023, due to weak demand and refining margins.
Refinery output in the world’s top crude oil importer dropped by 3.7% in June compared to the same month last year, amid tepid fuel demand and weakening refining margins, which prompted independent refiners to slash crude processing rates.
China’s apparent oil demand is likely to have slumped by 8.1% year-over-year to about 13.7 million barrels per day (bpd) in June, according to Bloomberg calculations.
Moreover, China’s GDP growth was 4.7% in the second quarter, below expectations of 5.1%.
In its monthly report last week, the International Energy Agency (IEA) said that underwhelming Chinese consumption is slowing down growth in global oil demand.
“Oil consumption in China, long the engine of global oil demand growth, contracted in both April and May, and is now assessed marginally below year earlier levels in 2Q24,” the IEA said, adding that Chinese demand for industrial fuels and petrochemical feedstocks was particularly weak.
By Charles Kennedy for Oilprice.com
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