Surprisingly Weak Iron Ore Imports and Surprisingly Strong Copper Imports In August In China

Date: 2015-08-19

Global seaborne metallurgical coal exports ran at 305mtpa in October, down 2% YoY and 6% MoM. This marks the 3rd consecutive month of sub-1% YoY growth (August was also down YoY, while September was up just 1%). This plateauing is mainly the result of weaker exports from North America, where a series of mine supply curtailments have been announced this year. However exports from Australia were also down YoY in October, falling 4.5% – the first YoY decline since January 2013. This is a reflection of the fact that there is essentially only one asset ramping up – BMA’s Caval Ridge – while for the rest, it is a question of how long the efficiency gains seen over the past two years can be maintained.

As noted in an earlier flash note, China released preliminary trade data on Monday, revealing surprisingly weak iron ore imports (-13% YoY to 67.4Mt) and surprisingly strong copper imports. Steel exports set a new all time record while coke exports pushed back up to close to the year’s high and aluminium exports (unwrought and semis) held at elevated levels. The iron ore number was the weakest since February, when trade is typically impacted by China’s New Year holiday, but looks suspicious to us given stable port inventories and mill inventory gains recorded during the month. Meanwhile, the unwrought copper and semis data was up 3.6% YoY to 420kt, implying cathode imports of around 310kt as the import arb improved tempting some bonded stocks over the border, while concentrate imports increased strongly (+25% YoY to 1.15Mdmt) as shipments of spot market deals struck opportunistically at high TCRCs in September/October came through in November, boosting overall volumes. 

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