- Crude oil imports in July fell to their lowest since September 2022.
- First seven months of 2024 saw a 2.9% decline in crude oil imports compared to 2023.
- Forecasted demand growth by OPEC and IEA now appears unlikely to be met.
China’s economic momentum appears to be faltering as evidenced by its declining commodity imports. In July, crude oil imports dropped to 9.97 million barrels per day, the lowest daily rate since September 2022.
This reduction in imports is concerning for industry forecasts. OPEC had predicted that China would drive global demand growth in 2024, expecting an increase of 760,000 bpd.
Declining Commodity Imports Signal Economic Challenges for China
The latest data on China’s commodity imports indicates significant economic challenges. July saw crude oil imports slump to 9.97 million barrels per day, marking the weakest level since September 2022. This decrease is part of a broader trend, with imports over the first seven months of 2024 averaging 10.90 million bpd, down 2.9% from the previous year.
Other major commodity imports, such as iron ore, coal, copper, and natural gas, have remained relatively stable. However, the sharp decline in crude oil imports highlights underlying issues within China’s economy, including potentially weakening industrial activity and lower energy consumption.
The discrepancy between actual import figures and industry forecasts raises concerns. OPEC’s July report had anticipated China leading global oil demand growth with an increase of 760,000 bpd. The IEA, while less optimistic, still expected China to account for a significant portion of global crude demand growth. The current import decline suggests these projections may not materialize.
For the forecasts to hold true, China would need an extraordinary recovery in crude oil imports in the latter half of the year. Given the ongoing economic uncertainties and potential for subdued industrial activity, achieving these targets appears increasingly challenging. This situation underscores the importance of monitoring China’s economic indicators closely.
The decline in China’s commodity imports, particularly crude oil, underscores the challenges facing its economy. Without a substantial turnaround, meeting optimistic demand growth forecasts seems unlikely, highlighting potential broader implications for global markets.
“With China’s imports actually falling in the first seven months of the year, it would take an extraordinary turnaround for the remaining five for the OPEC and IEA forecasts to be realised.”
