China Trade Surplus Smallest in 11 Months


China's trade surplus plunged to USD 4.12 billion in February 2019 from USD 32.3 billion in the same month a year earlier, missing market forecasts of USD 26.38 billion. It was the smallest trade surplus since a rare deficit in March 2018, as exports fell the most in three years and imports dropped for a third straight month. The trade surplus with the US, China's largest export market, narrowed sharply to USD 14.72 billion in February from USD 27.30 billion in January.

Exports tumbled 20.7 percent year-on-year to USD 135.24 billion in February, far worse than market expectations of a 4.8 percent decline and after a revised 9.3 percent growth in the previous month. This was the largest yearly decline in overseas sales since February 2016, amid weakening global demand, ongoing trade tensions with the US and a series of Lunar New Year holidays which started in early February. China's unwrought aluminium and aluminium product exports fell 7.3 percent year-on-year to a two-year low of 343,000 tonnes and plummeted 37.6 from January's record high of 550,000. Also, sales of steel products dropped 6.8 percent to 4.51 million tonnes and were down 27 percent from the prior month's 6.18 million tonnes. In addition, sales of rare earths tumbled 35.2 percent to 2,886 million tonnes and were down 23.1 percent from 3,752 million tonnes in a month earlier. In contrast, China's coal exports jumped 42.8 percent to 0.66 million tonnes in February and grew 9.5 percent from January's 0.6 million tonnes. Also, sales of coke & semi-coke advanced 7.5 percent to 0.69 million tonnes but were down 3.1 percent from the prior month's 0.71 million tonnes. Sales of rice soared 62.2 percent to 146,000 tonnes, and grew 4.3 percent from the previous month's 140,000 tonnes.

Among China's biggest trade partners, exports plunged to the US (-28.6 percent), the EU (-13.2 percent), ASEAN countries (-13.2 percent), Japan (-9.5 percent), South Korea (-6.9 percent), Taiwan (-7.3 percent) and Australia (-15.9 percent).

Imports dropped 5.2 percent to USD 131.12 billion, the third straight month of decline, compared to maket consensus of a 1.4 percent fall and following January's 1.5 percent decrease. Purchases of soybeans dropped 17.8 percent year-on-year to a four-year low of 4.46 million tonnes, and slumped 39.5 percent from January's 7.37 million tonnes, amid higher tariff imposed on shipments from the US. Also, imports of coal fell 15.6 percent to 17.64 million tonnes and tumbled 47.3 percent from the prior months' 33.50 million tonnes. Purchases of iron ore declined 1.4 percent to a ten-month low of 83.08 million tonnes and were down 9 percent from January's 91.26 million tonnes. Inbound shipments of steel products fell 19.7 percent to 0.82 million tonnes and decreased 30 percent from the prior month's 1.17 million tonnes. In addition, imports of unwrought copper dropped 11.1 percent to an 11-month low of 311,000 tonnes and slumped 33.8 percent from January's 470,000 tonnes. In contrast, imports of crude oil grew 21.6 percent to 39.23 million tonnes but were down 7.9 percent from 42.59 million tonnes in January. Also, purchases of copper ores & concentrates advanced 32.8 percent to 1.93 million tonnes, tying the all-time record set in September, and were up 1.9 percent from the prior month's 1.89 million tonnes.

Imports fell mainly from the US (-26.2 percent), ASEAN countries (-9.9 percent), South Korea (-15.9 percent), and Taiwan (-5.6 percent), but rose from the EU (2.5 percent), Japan (0.2 percent) and Australia (3.9 percent).

Considering January-February combined, the trade surplus declined nearly 14 percent from the same period a year ago to USD 43.71 billion, with exports and imports falling 4.6 percent and 3.1 percent respectively.

In yuan-denominated terms, China's trade surplus came in at CNY 34.47 billion in February, with exports and imports dropping 16.6 percent and 0.3 percent respectively.

China Trade Surplus Smallest in 11 Months


General Administration of Customs | Rida Husna | rida@tradingeconomics.com
3/8/2019 10:55:24 AM