China Goes Big on Commodities Purchase Amid Shifting Trade War
Soy imports rise to highest in about a year; coal, crude gain
Iron sees more signs of supply rebounding as disruptions ease
By Jasmine Ng and Sheryl Tian Tong Lee, Bloomberg
August 8, 2019
Commodity purchases by China rebounded strongly in July. Imports of soy to coal and crude oil gained, signaling demand in the world’s biggest buyer remains solid even as a trade spat with the U.S. escalates.
The increase comes as the nation’s overall imports shrank less than forecast while export growth rebounded, signaling some recovery in trade before new tariffs threatened by the U.S.
The nation’s total imports “look surprising,” with the strong commodity component driven by both rising prices and volumes, said Betty Wang, senior China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. “Coal and crude oil volumes also held up, which could be seen as signs of rising energy demand,” she said, adding that higher iron ore prices year-on-year also boosted the value of imports.
Soybean shipments jumped in July to the highest level in almost a year as Chinese crushers boosted volumes from South America, and before halting U.S. purchases. Imports rose to 8.64 million tons last month, from 6.51 million tons in June and 8 million a year ago. The strength may persist through August and September, which could raise inventories and slow future purchases.
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