China’s Crude Imports Plunge to Lowest in Nearly a Decade

(Bloomberg) -- Chinese crude oil imports fell sharply in June to near a decade low, hampered by war in the Gulf and an abrupt slowdown in domestic demand. 

Crude purchases plunged 41% year-on-year to 29.27 million tons, the least since October 2016, according to customs data on Tuesday. Imports were 12% lower than May, which were already the weakest in eight years.

The recent breakdown of the US-Iran truce clouds the prospects for any revival of cargoes through the contested Strait of Hormuz. The Middle East typically accounts for about half of China’s crude purchases. Still, the oil market is on watch for signs that imports have bottomed out and that Beijing will move to replenish stockpiles. 

Natural gas imports fared better, rising 3.7% in June to a five-month high of 10.93 million tons, with volumes boosted by increased seaborne imports due to a decline in domestic output and depleted storage buffers. Although the Iran war has choked shipments from a region that typically supplies about a third of China’s liquefied natural gas, the drop has mostly been offset by other sources.

China’s other main energy import, coal, saw shipments surge last month after a crackdown on mine safety curbed domestic supplies of the fuel.

Purchases in June soared 30% to 42.78 million tons, another five-month high. The blast at a mine in Shanxi province in May was the worst coal accident since 2009, prompting a nationwide review of safety practices. 

A confluence of factors, from Indonesian supply constraints to the impact of frequent rains on hydropower output, may keep a lid on imports in subsequent months. Still, China set a record for peak electricity consumption last week, and any extended heat waves could eat through stockpiles and necessitate a buying binge.

China’s other commodities trade data for June:

• Hormuz is also a channel for global fertilizer shipments. To conserve domestic supplies, China has responded by tightening controls over its exports, which plunged 48% year-on-year to 2.23 million tons, their lowest since April 2024.
• Aluminum exports, meanwhile, continued to strengthen, soaring 45% to a record 711,000 tons to help fill the global shortage caused by the war.
• Copper imports rose 3.1% to 478,000 tons, although the figure was lower than May as the US continues to attract cargoes ahead of possible tariffs from the Trump administration.
• Iron ore imports rose 6.4% to 112.69 million tons, the year’s high, on stronger shipments ahead of the end of the financial year in Australia, where most of China’s suppliers are based.
• Steel exports, which have helped offset poor domestic demand, remained strong, rising 6.6% to 10.32 million tons.
• Soybean imports increased 11% to 13.55 million tons, a 13-month high, on arrivals from both Brazil and the US following the trade truce with Washington. All eyes are on the second half of the year as Beijing ramps up purchases of American beans to meet its obligations.

On the Wire

China’s exports and imports expanded faster than forecast in June, as surging chip prices and global demand for hardware needed to power AI data centers lift trade across Asia.

Australia’s government has moved to block three China-linked shareholders of rare earths miner Northern Minerals Ltd. from voting or exercising other rights after they defied earlier orders to sell their stock.

China’s economic growth is expected to have weakened as of the mid-year mark, once again stoking questions about whether policymakers will accelerate government spending to ensure they meet their annual target.

Huawei Technologies Co.’s $11 billion clean energy empire is opening new markets.

China’s electric-vehicle industry is often seen as a success story of the central government creating global champions through subsidies, but breakthroughs came after years of decentralized experimentation and competition.

This Week’s Diary

(All times Beijing)

Tuesday, July 14

• China’s June trade balance and 1st batch of trade data, ~11:00
  • Crude oil, natural gas & coal imports; oil products imports & exports
  • Iron ore, copper & steel imports; steel, aluminum & rare earth exports
  • Soybean, edible oil, rubber and meat imports; fertilizer exports
• China to release June aggregate finance & money supply data by July 15
• OilChem LDPE conference in Suzhou, day 2

Wednesday, July 15

• China home prices for June, 09:30
• China’s industrial output for June, including steel & aluminum; coal, gas & power generation; and crude oil & refining, 10:00
  • Retail sales, fixed assets investment, property investment, residential sales, jobless rate
    • 2Q GDP
    • 2Q pork output and inventory
• CCTD’s weekly online briefing on coal markets, 15:00
• OilChem LDPE conference in Suzhou, day 3

Thursday, July 16

• Mysteel Asia Steel Forum in Beijing

Friday, July 17

• China’s weekly iron ore port stockpiles
• SHFE’s weekly commodities inventory, ~15:30
• China’s June output data for base metals and oil products

Saturday, July 18

• China’s 2nd batch of June trade data
  • Grains, sugar, cotton, palm oil, pork & beef imports
  • Oil products imports & exports breakdown; LNG & pipeline gas imports
  • Bauxite, steel and aluminum imports; rare-earth product, alumina and copper exports
  • Clean-tech exports including EVs, batteries and solar

(Updates with new material from seventh paragraph)

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