Another Contraction in China's Dry Bulk Imports

As we discussed in Commodore Research's most recent Weekly China Report, coal, iron ore, and soybean imports in October collectively totaled 152.5 million tons. This is down by 12.6 million tons (-8%) from September and down year-on-year by 10 million tons (-6%). Imports have now contracted on a year-on-year basis for two straight months. September's totals came in 18% below December's peak. However, volumes are still relatively high.

Iron ore imports totaled 105.7 million tons. This is down by 4.1 million tons (-4%) from September and down year-on-year by 5.6 million tons (-5%). Iron ore imports are coming under pressure due primarily from recent cuts in global iron ore production. Coal imports totaled 39.4 million tons. This is down by 4 million tons (-9%) from September and down year-on-year by 2.3 million tons (-6%). China's coal imports have fallen as both steel output (affecting coking coal imports) and coal-derived electricity generation (affecting thermal coal imports) remain in year-on-year contractions. As we have been stressing in our recent Weekly China Reports and Weekly Executive Reports, the newest and most concerning development in China is that thermal coal-derived electricity generation has contracted on a year-on-year basis for three straight months. Soybean imports totaled 7.4 million tons. This is down by 4.5 million tons (-38%) from September and down year-on-year by 2.1 million tons (-22%). Soybean imports have fallen primarily due to high domestic inventories and weak crushing margins.

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