China's oil imports in April fall to a three-year low, soybean imports surge nearly 40%

Import Pressure on Crude Oil and LNG

According to data from the General Administration of Customs of China, China's crude oil imports in April plummeted by about 20% year-on-year to 38.47 million tons, the lowest level since July 2022. Since the United States launched a military strike on Iran on February 28th, Iran has announced a ban on ships passing through the Strait of Hormuz. Data from Clarksons Research shows that as of early April, the average daily transit volume of vessels through the Strait of Hormuz dropped sharply from 125 before the conflict to just a few, with normal commercial shipping having largely withdrawn.

The Middle East typically accounts for about half of China's crude oil imports and provides nearly a third of liquefied natural gas. China's natural gas imports in April fell by about 13% year-on-year to 8.42 million tons. Commodity analysis firm Kpler's ship tracking data indicates that China's LNG purchases in the month dropped to an eight-year low.

Finished product exports plummeted by about 38% year-on-year to 3.12 million tons, the lowest in nearly a decade. Due to concerns about domestic energy shortages, China prioritizes the allocation of finished products for domestic consumption.

Currently, no substantial breakthrough has been achieved in U.S.-Iran negotiations. As long as the blockade of the Strait of Hormuz continues, it will be difficult to fundamentally reverse the situation of China's energy import pressure. The domestic refining plant's operational rate, supply of finished products, and cost pressures on related industry chains will continue to be tested.

Coal Fails to Compensate, Soybeans Increase Against the Trend

The theoretical gap in natural gas supply should increase the demand for coal substitution, but in April, coal imports also fell by about 13% year-on-year to 33.08 million tons, the lowest since June last year. The reason is the relatively high price of imported coal, leading China to rely on domestic production to fill the gap.

Unlike energy, China's soybean imports in April increased by nearly 40% year-on-year to 8.48 million tons, boosted by the United States and Brazil's seasonal supply.

Aluminum Exports Reach a New High, Steel Struggles with Shrinking Middle Eastern Demand

Leveraging its position as the world's largest aluminum producer, China has turned its surplus aluminum capacity into export growth. In April, exports of unwrought aluminum and aluminum products increased by about 15% year-on-year to 598,000 tons, hitting a 17-month high.

The import of copper metal slightly recovered to 452,000 tons, benefiting from the drop in international copper prices in March due to concerns about global economic growth, but the import volume of copper concentrate dropped by about 20% year-on-year to 2.35 million tons.

Steel exports, however, performed weakly, declining by about 9% year-on-year to 9.5 million tons. This might be because the Middle East has become an important buyer for Chinese steel mills in recent years, and the turmoil in the region has directly suppressed demand.