Russell: China's commodity imports will continue to decline until 2025 due to economic and trade concerns

China's imports have been weak in 2025. This is in line with the recent trend of a softer economy.

According to data released by the official customs on Friday, imports of crude, natural gas and iron ore, as well as copper, have all decreased in the first half of this year when compared to the same period of last year.

The January-February period saw a rise in coal imports compared with the same period of 2024. However, the figures were significantly lower than in November and Decemeber, which suggests that China is losing interest in this fuel.

China's economy is facing more uncertainty as a result of the tepid beginning of the year. This is especially true given the escalating trade tensions between the U.S. and the Trump administration.

This was evident in the drop in crude oil imports, which fell to 83.85 metric tons during the first two month period, or 10.42 million barrels a day.

The barrels per day are down by 3.4% from the 10.79 mbpd for the first half of 2024. It is also lower than the 11.31 mbpd imports in December.

China combines data on imports for January and for February in order to reduce the impact of the Lunar New Year, which is a week-long holiday that changes every year.

It is possible that stricter sanctions introduced by the former U.S. President Joe Biden in January on Russian crude oil exports have reduced some of China's demand for imports.

It also appears that Chinese refiners did not make any effort to find crude from other sources to replace lost Russian cargoes. This is likely due to the high crude prices in the world that were prevalent at the beginning of January.

Brent crude futures reached a six-month-high of $82.63 per barrel on January 15th, a time at which some cargoes arriving in February and March would have been arranged.

In Asian trade, the price of crude oil has dropped to about $69.52 per barrel amid rising geopolitical tensions and trade disputes. However, it is too early to tell if this level will be low enough to entice Chinese refiners to buy again.

LNG PRICES

The high spot price may have also affected imports of LNG. Customs data shows that LNG and pipeline gas arrivals were 20.31 millions tons, down from 22.1 million for the first half of last year.

Spot LNG delivery to North Asia The price of British thermal units reached a 15 month high in mid-February at $16.10, but had been hovering around $14 since November. This was almost twice the level in February 2024.

Imports of coal of all grades reached a record for the period January-February of 76.12 millions tons, an increase of 2.1% over the 74.52 millions last year.

This number is misleading, because it's also down 29% compared to the 107.33 millions tons of the two previous months (December and November).

This sharp drop from the last two month of 2024 is likely due to the fact that coal production in China has been high and power plant inventories have increased, reducing demand for imported fuel.

Imports of iron ore (the key raw material for steel) were down 8.4% in the first half of 2025 compared to the same period of last year, to 191.36 millions tons.

In February, imports could have been affected by the delayed shipments of top Australian producer Australia. A cyclone had disrupted shipments out of Western Australia.

The outlook for iron ore consumption this year is cautious at best, particularly in light of the fact that the state economist's advice this week, which stated that the steel production this year should be lower than in 2024, suggests that the demand for the metal will likely fall.

Imports of copper, an industrial metal that is often regarded as a bellwether for the economy, dropped 7.2% to 837,000 tonnes in the first half of the year.

The lower demand for unwrought Copper is likely to be a reflection of the higher prices. London contracts rose from $8,768 per ton by 2024's end to a maximum of $9,739 per ton on March 5th, an 11% increase.

When prices rise rapidly or sharply for commodities, Chinese buyers will tend to reduce imports. They may also turn to their inventories.

The price increases are helpful in explaining the weak imports of crude, natural gas, and copper. However, they do not help much when it comes iron ore, and coal. Both saw declines in prices during the first two month of this year.

It's more likely that the price impact has added to a trend of declining imports for China.

These are the views of the columnist, who is also an author. (Editing by Stephen Coates).

(source: Reuters)