China imports record volumes of oil, iron ore in July

China’s oil imports in July rose 18% to 19.6 million metric tons and iron ore purchases increased 5% to 58.1 million tons from the previous month, Bloomberg reported. China, the world’s largest importer of iron ore and the second-largest consumer of energy, spent US$13.8 billion on the two commodities to fuel higher industrial output attributed to public-work spending and a credit boom, as well as a stimulus-fueled increased in steel demand and prices. Chinese steel prices have risen 30% since April. It is suspected that refiners and mills may be stockpiling resources to brace against an anticipated price increase. “Demand recovery alone cannot justify the imports surge last month. China, as a price taker, is building inventories betting on crude prices to gain. Record imports also supplement weak domestic production,” said Wang Aochao, chief oil analyst at UOB-Kay Hian.