A November to remember: China trade figures trash forecasts
Even the most bullish of estimates turned out to be wide of the mark, as 11th month adds to hopes for a 4Q upside surprise
China’s foreign trade figures resoundingly beat consensus estimates in November, striking the same buoyant note sounded by the stellar recovery in the Manufacturing Purchasing Manager’s Index (PMI) released on December 1.
The median of 43 forecasts received by Bloomberg was for a 5% drop in exports and a 1.9% decline in imports. Those turned out to be well wide of the mark, and even the most bullish analysts got the figures wrong: Mizuho Securities’ Jianguang Shen tipped a 0.1% decline in exports, while Larry Hu of Macquarie Securities went out on a limb, predicting a 2% bump in imports.
As it turns out, exports expanded 0.1% from a year ago, while imports grew also, by a solid 6.7%, according to China Customs. That resulted in a respectable monthly trade surplus of US$ 44.6 billion dollars, down only marginally from October’s US$49.1 billion.
Both export and import growth rates showed substantial improvement on October’s, when they decreased by 7.3% and 1.4%, respectively.
Key import commodities
Crude oil imports reached 32.35 million tonnes in November, up 18.3% from a year earlier and 3.56 million tonnes more than for October. The average buying price of crude was US$347 per tonne, higher than the previous month’s US$327.
Domestic demand for crude oil continues to show a steady upward trend, driven by increased car ownership, despite some month-on-month fluctuations.
Iron ore imports increased 12% to 91.98 million metric tonnes compared to the same period last year. The total value saw a climb in November to US$5.53 billion, with the average import price at US$60.1 per metric tonne, down less than a dollar on the previous month.
Coal imports increased a massive 117% from a year ago, reaching 26.97 million metric tonnes for November. The total volume of coal imports for the first 11 months is now up 9.2% compared to last year. A supply shortage during November spurred the surge in seaborne imports.
Top trading partners
There was strong recovery of imports to China from key regions, notably double-digit growth rates in imports from the European Union, United States, and Japan. The rest of Asia also benefited to varying degrees, with the ASEAN community as a whole receiving the bulk of surging orders for a third month straight.
In terms of China’s major export destinations, there are grounds for optimism on the horizon as well. European shipments expanded by 5.6%, significantly better than October’s -8.8%. Exports to the United States fared even better: they were up 6.9%, against last month’s -5.6%. China’s Asian neighbours also stepped up purchases, led by Taiwan’s 7.0 percentage point gain.
Overall, the data for November continues to bolster the view that China’s 4Q GDP could offer an upside surprise after coming in at 6.7% for three consecutive quarters.