Jan 09, 2012 BEIJING (Dow Jones)--China's commodity imports generally slowed in December but stayed at relatively elevated levels, with copper imports surging to a record monthly high as low prices fueled bargain buying, customs data showed Tuesday.
Import appetite in the world's second-largest economy is closely watched as a proxy for industrial consumption amid a real estate weakness and external growth headwinds.
The overall performance on the trade front showed import appetite still relatively resilient but it could be more a result of cyclical factors and opportunistic buying rather than strong underlying demand, industry participants said.
Copper imports in December reached 508,942 metric tons, a 48% rise on year and a 13% rise from November to their highest monthly volume on record.
The surge broke with expectations among analysts that December copper imports would come off November's high.
Part of the reason for the strong imports in November and December was that long-term copper supply contracts are typically fulfilled toward the year-end.
"Copper prices during the period were relatively low, even though the arbitrage window (which would encourage copper shipments to China) was not that attractive," said Shanghai Cifco analyst Fang Junfeng.
Still, copper import volumes for the full year fell 5% from 2010 to 4.1 million tons, on the back of weaker import volumes earlier in the year.
Iron ore imports last month rose 10% on year to 64.1 million metric tons, easing 0.2% from the second-highest monthly volume this year posted in November.
Despite expectations that a reeling real estate sector would trim demand, China imported a record volume of ore in 2011, up 11% at 686 million tons, as steel makers took advantage of price dips to stock up on the strategic raw material.
"China has clearly been taking advantage of the low prices and has already been trading opportunistically again," Commerzbank said in a note. "We believe that China will continue to import large quantities of metals in the coming months."
Ore import prices rose 9% between early November and December, suggesting that bargain buying remains in vogue.
Still, China's property sector, a major consumer of steel products, remains weak. Home prices eased for a fourth-straight month in December, resulting in "continued dismal demand ahead of China's Golden Week," Steel Market Intelligence said in a note Tuesday.
Soybean imports were in line with a forecast last month by the China National Grain and Oils Information Center, coming in at 5.4 million tons in December, basically flat on year but a 5% decline compared to November.
Import volumes in 2011 fell 4% from 2010 to 52.6 million tons.