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China soybean imports up 11%

01/10/2013 @ 6:37am

China imported record volumes of industrial and agricultural commodities last year, shrugging off a late-summer slowdown as domestic demand rebounded toward the end of the year.

China is the world's largest consumer of many commodities, and its appetite for imports can have a strong impact on global trade patterns.

Data issued Thursday underscore a trend indicated by broader macroeconomic data of resurgent manufacturing activity and industrial output as well as steady growth in the country's food demand.

December's imports of iron ore, a steelmaking material that is also a proxy for industrial demand, rose 10.7% from a year earlier to a record 70.9 million metric tons, contributing to full-year record volume of 743.6 million tons, the General Administration of Customs said.

"Portside stocks of mainstream ore products in China became increasingly hard to come by, leading to soaring prices," The Steel Index said in a research note, noting that demand for flat steel--more often used in manufacturing--fared better than construction steel.

Prices of iron ore have risen 70.5% from their trough in early September, to around $156 a ton, data from The Steel Index showed. Port stocks have fallen to around 80 million tons from more than 100 million tons in the late summer, as China's manufacturing sector recovered.

An index of service-sector activity from the official China Federation of Logistics and Purchasing posted last week showed growth for a third straight month in December, reinforcing two similar indexes that showed signs of a rebound last month.

Industrial output in November, the most recently available data, also rose a strong 10.1% from a year earlier, exceeding the median 9.8% forecast by 15 economists.

"Investors, traders and mills all turned bullish after the Central Economic Work Conference [a key policy meeting], driving the expectations on material demand in 2013, especially after the Chinese New Year," Citi analyst Scarlett Chen said.

China's imports of copper, copper alloy and semifinished products last year also reached a record, at 4.65 million tons, up 14%, the customs data showed.

December's copper imports fell 24.5% on month and 33% on year to 341,211 tons, likely a sign that copper stocks in bonded warehouses were relatively high on the back of strong imports in preceding months.

China's domestic copper production has also risen in tandem with recovering demand, hitting a record volume in November.

The country's imports of agricultural commodities also showed strong growth in 2012, as lower prices for cereals in international markets spurred buying of corn, wheat and rice, while strong domestic demand for animal feed boosted imports of soybeans.

Soybean imports in 2012 hit a record 58.38 million tons, up 11.2%, while edible oil imports rose 29% to a record 8.45 million tons, the data showed.

Imports of cereals, which include wheat, rice and corn, more than doubled on year, to 13.98 million tons, though import levels remain a small fraction of China's annual grain consumption of around 550 million tons.

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