PREVIEW-China's April commodity imports to show modest recovery
* April trade data due Wednesday
* Increases expected for most commodities, copper to dip
* Pressure on manufacturing may cap growth in Q2
By Fayen Wong
SHANGHAI, May 6 (Reuters) - China's main commodity imports are expected to rise in April from a month ago, supported by a seasonal recovery in demand, but the pace of growth in the second quarter will likely be capped by constraints on manufacturing.
China will release preliminary April trade data on Wednesday.
Shipments of crude oil, iron ore and soybeans are all likely to have climbed for a second month, after shipments fell in February due to a week-long holiday, although copper arrivals may ease slightly due to port strikes in top exporter Chile, traders said.
"We should see an overall trend of gradual improvement. Fixed-asset investment grew quite strongly in March and should continue to accelerate, which will bode well for iron ore and copper," said Judy Zhu, a commodities analyst with Standard Chartered.
"But the manufacturing sector will face continued pressure from an uncertain global outlook and that should keep China's commodities demand in check."
Imports of crude oil, copper, aluminium and soybeans all fell in the March quarter -- between 2.3 percent and 45.6 percent from year ago. This marked their first quarterly fall in at least a year as factories slowed production due to fewer orders and developers scaled back on construction after a property market clampdown.
Recent disappointing manufacturing data has raised doubts as to whether China's economic recovery will accelerate enough in 2013 to sustain big increases in commodity imports, especially as new supplies are coming onstream and demand from Europe remains lacklustre.
China's annual export growth may have picked up slightly in April due to a low comparison from a year ago, while import growth probably eased, a Reuters poll showed, suggesting the underlying momentum for both the domestic and global economies remains tepid.
Many traders expect crude oil imports in April will hover around March levels, as some refineries have continued with maintenance programmes amid high fuel stocks.
Sinopec Qilu refinery has shut down its 800,000 tonnes per year ethylene complex and an 80,000 barrels per day (bpd) crude distillation unit in early April for maintenance, while PetroChina's Dalian refinery continued maintenance on a 90,000 bpd crude distillation unit, sources said.
Daily crude oil imports by the world's second-largest oil consumer fell 2.1 percent in March versus a year earlier to 5.43 million bpd.
Total imports in the first quarter fell 2.3 percent from 68.97 million tonnes a year ago.
Arrivals of copper in April are expected to fall slightly from March's 218,823 tonnes, after port strikes in Chile delayed term shipments. Shipments due to arrive China in April are now expected to arrive in May and early June.
Still, improved price differentials between the London Metal Exchange and Shanghai copper prices prompted more spot buying of the refined metal by importers, which would support monthly volume.
"We saw fewer Chilean shipments arriving in April, which should make total imports less than March," a trader at an international trading house said.
Shipments of refined copper fell 36.7 percent in March from a year ago, while total imports in the first quarter dropped 35.9 percent.
Imports are expected to have risen in April from the 64.55 million tonnes that arrived in March. This took total shipments in the first quarter 186.5 million tonnes, flat on a year earlier.
"Steel production is still running at very high levels but iron ore inventories at ports and mills remain high, which means imports have risen in April from March," said an iron ore trader in Shanghai.
Average daily crude steel output by the world's top producer rose to above 2.1 million tonnes in April from about 2 million tonnes in mid-February, data from the steel association showed.
China's soy imports in April are expected to have risen to 4.27 million tonnes from 3.58 million tonnes in March after an easing in port congestion at main supplier Brazil, according to forecasts by China National Grain and Oils Information Centre.
The official think-tank forecast imports should climb further in May to 5.65 million tonnes, the highest so far this year. The surge in shipments would come amid lower restocking needs from poultry breeders due to a bird flu scare, and could ease tight domestic supplies and weigh on prices. (Additional reporting by Ruby Lian, Judy Hua, Niu Shuping and Polly Yam; Editing by Richard Pullin)
- Tweet this
- Share this
- Digg this
Trending On Reuters
The government plans to raise about 891.2 billion rupees ($14.4 billion) by reducing its stakes in state-run banks to 52 percent, the junior finance minister said on Friday, sending shares of state lenders higher. Full Article
Forever21 sets sights on Indian cities, but please hold the hot pants Full Article
Japan inflation slows in October, output and spending show signs of recovery Full Article