China’s imports of natural gas and coal showed strength in October, but weakness could be observed in purchases of overseas crude oil, iron ore, and copper. Analysts said that the mixed pattern in China’s commodity imports last month indicated the impacts of energy shortages on the world’s second-largest economy. China needed to boost power generation fuels by importing more coal and natural gas. At the same time, the ongoing power crunch hurt energy-intensive industries such as refining, copper and steel making.
Official customs data showed China imported 26.94 million tons of coal in October. That represents an 18% drop from September but nearly doubled the 13.73 million tons a year ago. China’s coal imports have been trending higher since June as domestic output could not match surging power demand. The increase also indicated that Chinese buyers were desperate enough to secure shipments despite record-high prices during the month.
China’s natural gas imports came in at 9.38 million tons in October, rising by 24.6% from a year earlier. Over January-October, China’s total natural gas imports, including LNG and piped gas, gained 22% from a year ago. The increase in gas imports also came as Asian spot LNG prices hit a record high of $38.50 per MMBtu in mid-October.
In contrast, crude oil imports weakened to a three-year low of 8.9 million bpd in October. Oil imports for the first ten months of 2021 also dropped 7.2% year-on-year to 10.21 million bpd. The decline mostly reflected independent refiners cutting feedstock purchases amid limited import quotas. However, refiners also slashed production amid the power crunch and strict environmental inspections.
The power shortages also affected China’s manufacturing sector, which can be observed in imports of iron and copper ores. Iron ore imports dropped 14.2% year-on-year to 91.61 million tons in October. Imports of unwrought copper were down 33.6% year-on-year to 410,541 tons. China’s manufacturing Purchasing Managers’ Index fell to 49.2 last month, having been below the 50-point threshold since September.
