China’s commodity imports are on the way down

China’s commodity imports fell back in April compared with a month earlier. This chimes with our view that imports of industrial commodities into China will come off the boil as economic growth there slows. In turn, this should be a factor dragging the prices of industrial metals lower by year-end.
Kieran Clancy Assistant Commodities Economist
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Commodities Update

China PMIs point to weaker metals demand

China’s July survey data suggest that manufacturing and construction activity have continued to cool, which supports our view that a slowdown in China will weigh heavily on industrial metals prices.

"Due to wider interest, this Update is also being sent to clients of our Metals Service"
China slowdown webinar: Join us on Thursday, 5th August for a special webinar assessing the impact of China’s economic slowdown on the global recovery. Neil Shearing will lead a discussion with economists from across our economics and markets services to assess whether investors should brace for fresh volatility with China poised for a structural deceleration. Register here for sessions at 0900 BST/1600 HKT or 1100 ET/1600 BST.

2 August 2021

Commodities Weekly Wrap

Supply disruptions remain a key risk

The recent bounce in commodity prices continued this week, helped by the ongoing depreciation in the US dollar and a series of risks on the supply side which are rearing their head. Most notably, a spell of cold weather in Brazil has dampened the supply outlook for several agricultural commodities, while ongoing wage negotiations at a major copper mine in Chile threaten to end in strike action. Though we are sceptical that the weakening in the US dollar will last, we are less sanguine about the risks to supply. Indeed, were these risks to materialise and/or intensify, they may prevent prices from falling by as much as we expect by the end of the year.

30 July 2021

Commodities Outlook

Price rallies to soon give way to broad-based declines

We think that the widespread rallies in commodity prices from their pandemic-induced lows are now close to, or in some cases already past, their peak. Most notably, we anticipate that Q3 will be as good as it gets for the oil price, and that it will start to ease back by the end of the year as OPEC+ continue to unwind their collective output cut and demand growth slows. Meanwhile, the rally in industrial metals prices already seems to have fizzled out, and we think this will soon give way to a protracted decline in prices as economic growth in China disappoints over the next couple of years.

29 July 2021

More from Kieran Clancy

Industrial Metals Update

Detailed China trade data highlight supply risks

The breakdown of China’s trade data for May shows that the recovery in imports of scrap and tin ore has hit a few stumbling blocks. Were these issues to persist, they could help to put a floor under prices even if, as we expect, the decline in demand for refined metal in China continues.

1 July 2021

Energy Update

Restocking boost to LNG prices to fade soon

After rising (and falling) sharply at the start of the year, Asia LNG prices have started to push higher again recently. This latest rise seems to have been driven by a rebuilding of stocks, which should run its course over the coming months. That said, the outlook for spot Asia LNG prices further ahead remains bright.

9 June 2021

Energy Data Response

US Weekly Petroleum Status Report

US commercial crude stocks declined for the fifth week in a row, owing to the robust economic recovery and a further increase in inputs to refineries. With demand set to rise further, and few signs of a rebound in domestic production, crude stocks should continue to fall in the weeks ahead.

3 June 2021
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