LAUNCESTON, Australia (Reuters) – It’s tempting to look at China’s imports of major commodities in July and conclude that the strength is a sign that the escalating trade dispute with the United States isn’t having much of an impact.
While the first of the tit-for-tat tariffs came into effect in July, it will likely take several months before any real impact is discernable, and even then, separating out the effect of trade measures from other factors will be tricky.
In the meantime, the commodity trade data can still provide insight to China’s economy, and it’s largely painting a picture of resilience. Imports of crude oil rose slightly in July to about 8.48 million barrels per day (bpd), up from June’s 8.36 million, according to customs data released on Wednesday.
However, the market chose to focus more on the fact that July was the third-weakest month this year, and that the smaller, independent refiners known as teapots have cut back on their purchases.
A combination of higher crude prices and changes in government taxes have been blamed for the weak growth in crude imports, and these factors have certainly tilted the playing field against smaller refiners.
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