By Clyde Russell

LAUNCESTON, Australia (Reuters) – China’s imports of major commodities in 2024 show a mixed bag, with record amounts of iron ore, coal and , but weakness in .

Raw data for the world’s largest buyer of natural resources suggest that parts of the economy are performing strongly, but others are struggling, or undergoing structural changes.

However, the main challenge in analyzing Chinese product imports is to separate temporary factors from changes that are part of a long-term trend.

Crude oil is perhaps the best example of this.

Imports for 2024 are 553.42 million metric tons, according to customs data released on Monday. This is equivalent to 11.04 million barrels per day (bpd) and decreased by 2.1%, or 210,000 bpd from 2023.

It is tempting to say that 2024 shows that the world’s largest crude oil importer has reached its peak, and that 2025 and subsequent years will see lower arrivals.

The main reason for this is the rapid arrival of more than 50% of the market in China’s so-called New Energy Vehicles (NEV), a term that groups fully electric vehicles. and hybrids.

While the transition to NEVs is impressive and likely to continue on pace, it is worth noting that China’s internal combustion engine vehicle fleet is still growing, so theoretically so should demand for gasoline.

The picture for diesel is similar to an alternative is eating the market share of heavy transport fuel, with trucks powered by liquefied natural gas (LNG).

China’s natural gas imports, both in LNG and from pipelines, rose nearly 10% in 2024 to 131.69 million tons.

But perhaps the most important factor driving lower crude oil imports is the price, with benchmark futures holding above $70 per barrel for all but two days in September when it falls. quickly below this level.

The stability of crude oil prices this year reflects the output discipline of the OPEC+ group of exporters, who cut an effective 5.5 million bpd from potential supply.

But it’s also likely the case that Chinese refiners see that crude oil prices are higher than they need to be, and they’re reducing their purchases accordingly.

IRON ORE, COAL RECORDS

On the other side of the weak import of crude oil amid high prices, it seems likely that the import of iron ore and coal has largely been achieved on the back of lower costs.

Imports of iron ore increased by 4.9% in 2024 to 1.236 billion tons, a gain of 57.5 million tons.

The price of iron ore contracts traded on the Singapore Exchange (OTC:) had a 2024 peak very early in the year, hitting $143.60 a ton on January 3.

They then declined to a low of $91.10 a ton on Sept. 10, before recovering to end the year at $103.61.

But the 28% year-over-year drop is likely enough to prompt Chinese steel mills and traders to increase purchases, especially in the second half of the year when prices are lower than the first. which is half.

It is also the case that Chinese steel mills are not buying more iron ore because they are producing more steel, with official data showing that crude steel production in the first 11 months of 2024 was 929.19 million tons, decreased 2.7% from the same period in 2023.

However, most of the excess iron ore ended up in stockpiles, with port inventories monitored by consultants SteelHome ending last year at 146.85 million tons, up from 114.5 million at the end of 2023.

Coal imports also hit a record high in 2024, reaching 542.7 million tons, up 14.4% from 2023’s 474.42 million.

Coal demand has increased amid lower hydropower generation and electricity demand gains, but the main increase in imports is that offshore prices compete with domestic output, thus encouraging the utilities, especially in the south of the country, which turn to supplies from Indonesia and Australia.

Indonesian coal with an energy content of 4,200 kilocalories per kg was assessed by commodity price reporting agency Argus at $49.97 per ton in the week to December 30, down 13.5% on the year and the lowest since April 2021.

GOOD GARDEN

There is a major commodity with a more consistent 2024, and that is, with imports of unwrought copper increased by a modest 3.3% to 5.68 million tons.

Since the record high of 6.68 million tons in 2020, China’s copper imports have remained in a relatively narrow range between 5.5 million and 5.87 million.

This is perhaps the best indicator of the true state of China’s economy, given the important role of copper in manufacturing and construction.

Copper imports point to slow growth in the world’s second-largest economy, as strong sectors such as NEVs and energy conversion products such as solar panels are not enough to offset weaker ones. areas such as residential construction.

The views expressed here are those of the author, a Reuters columnist.