China's commodity imports soar in December

BEIJING (Reuters) – China ended 2009 with record monthly imports of crude oil and soybeans and a strong appetite for iron ore and copper, while its aluminum and steel sectors saw a welcome increase in export volumes.

Crude oil imports averaged more than 5 million barrels per day for a month for the first time in December, up by more than a fifth from November at 21.26 million tons, while the total for 2009 rose 13.9 percent to 203.4 million tons.

The return to double-digit annual growth followed a 9.6 percent rise in oil imports in 2008 when prices rose beyond $100 per barrel. In 2009, China’s refineries racked up processing volumes to power a recovering economy, aided by a fuel pricing regime that largely guarantees a fixed margin.

But in a sign the volume of oil imports might not reflect real demand, the country, traditionally an importer of refined fuel, flipped to being a net seller as a 64 percent leap in exports outstripped a 39 percent rise in imports.

The glut of fuel could be set to increase — trade sources have told Reuters that China has lined up more crude from Kuwait, Saudi Arabia and Iraq this year, and a Reuters poll found refiners planned to start the new year with record crude runs to embrace market optimism.

The question mark over ‘real’ demand for oil in a year of stockpiling and rampant production in China, has made it harder for traders and the government to judge the level of real economic activity.

Reuters