LAUNCESTON, Australia, Oct 15 (Reuters) – It’s tempting to look at the relative resilience of China’s imports of major commodities in September and conclude that the world’s second-biggest economy is weathering the trade dispute with the United States quite well.
The problem with this view is that while the trade conflict certainly looms as an issue in China’s commodity trade, it’s not yet the driving factor and any strength, or weakness, in various imports is largely a result of different dynamics.
Take copper for example, where imports of unwrought metal in September were 521,000 tonnes, up 24 percent from the 420,000 tonnes in August to the highest in 2-1/2 years.
This looks like an extremely strong monthly gain, and would seem to be at odds with the narrative of a loss of momentum in the Chinese economy as trade war fears escalate.
But the main driver of September’s strong result is as a result of a crackdown on the use of copper scrap, part of government efforts to limit the importation of waste products.