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Chinese commodities imports slow as Lunar New Year holiday cools trade
[BEIJING] China's commodity trade slowed in February as the Lunar New Year holiday crimped imports of oil, iron ore copper and soybeans while exports of aluminum and steel fell.
Inbound shipments of copper tumbled by the most in four years, soybeans to the least since October, while oil and iron ore imports slowed to the weakest in three months, according to customs data released Sunday in Beijing. Steel exports fell for the first time since August and the country shipped the smallest amount of aluminum products in four months.
The slowdown in raw materials trade reflects the impact of the country's most-important festival, when factories and output slow before and during the weeklong holiday. Total exports gained more than 48 per cent from a year earlier in February, driven by a recovery in the US economy. Imports slid 20.5 per cent, leaving a record trade surplus of US$60.6 billion.
"The Chinese New Year is a major distortion for trade data," said Xie Zhaowei, a Shanghai-based analyst at Huatai Great Wall Futures.
"Demand remained subdued inside China even if you strip out the impact of the week-long holiday as the economy is slowing."
Chinese Premier Li Keqiang last week announced the country set its economic growth target at 7 per cent for this year, the lowest goal in more than 15 years, as headwinds including a property slump, excess industrial capacity and disinflation prompted the second interest-rate cut in three months.
Imports of unwrought copper and products in February fell 32 per cent from the previous month to 280,000 metric tons, the biggest decline since February 2011. The nation's imports of ore and concentrates, used to make the refined metal, declined for a second month. Benchmark prices in London are down 9.1 per cent this year.
China's copper demand will grow this year by 5 per cent, unable to keep pace with the country's economy as the government shifts its focus away from infrastructure and manufacturing toward consumption, Li Baomin, chairman of Jiangxi Copper Co., the nation's biggest producer of the metal, said in an interview last week.
Crude imports fell 8.7 per cent from January while iron ore imports slid 9.5 per cent, both the lowest since November. The country remained a net oil-product importer, with inbound purchases outpacing exports by 1 million tons.
Outbound shipments of steel products fell for the first time in six months as new tax rules designed to cut oversupply in the industry began to slow sales. The country's shipments fell 24 per cent to 7.8 million tons from a record the previous month. Aluminum product exports slid for a second month to the lowest since November.
The weaker trade data will "drive a bearish tone in commodity markets, especially industrial metals," analyst at Australia & New Zealand Banking Group Ltd. said in a note on Monday.
Copper for delivery in three months on the London Metal Exchange fell 0.3 per cent to US$5,729.50 a ton at 10.44am in Hong Kong.