China April Trade Surplus Far Below Estimates


China's trade surplus fell to USD 13.84 billion in April 2019 from USD 26.21 billion in the same month a year earlier and missing market consensus of a surplus of USD 35.0 billion. Year-on-year, imports advanced 4.0 percent to USD 179.65, while export fell 2.7 percent to USD 193.49 billion. The trade surplus with the US, China's largest export market, was at USD 21.01 billion in April, little-changed from a surplus USD 20.50 billion in March.

Imports surprisingly rose by 4 percent year-on-year to USD 179.65 billion in April, against market expectations of a 3.6 percent fall and reversing from a 7.6 percent drop in the previous month. This marked the first yearly increase in inbound shipments since November last year. Purchases of crude oil surged 11 percent year-on-year to a record high of 43.73 million tonnes, equal to 10.64 million barrels per day/bpd, and rose by 15 percent from March's 9.26 million bpd. Also, total natural gas imports went up 12 percent year-on-year to 7.65 million tonnes, and grew by 10.2 percent from March's 6.94 million tonnes. In addition, inbound shipments of soybeans expanded 10.7 percent from the prior year to 7.64 million tonnes, with buyers delaying cargoes to arrive in April to take advantage of a cut in the value-added tax/VAT on agricultural products effective from 1st April; and soared 55 percent month-over-month from 4.92 million in March. As part of a trade conflict with the US, China slapped a 25 percent tariff on US soybeans last July. The US and Brazil were the two largest suppliers of soybeans to China until the start of the trade row. In contrast, China's iron ore imports fell to the lowest in 1-1/2 years, as poor weather in Brazil, the country's second-largest supplier, disrupted shipments; and as some mining production halted their production following recent accident. Inbound shipments of coal went up 13.6 percent to 25.3 million tonnes. Additionally, purchases of unwrought copper decreased 8.4 percent to 405,000 tonnes, but rose 3.6 percent from the prior's month 391,000 tonnes.

Among China's biggest trade partners, purchases grew mainly from Japan (1.4 percent), the EU (4.4 percent), Australia (18 percent) and the ASEAN countries (10.4 percent), while contracted from the US (-25.7 percent), South Korea (-2.4 percent), and Taiwan (-6.8 percent).

Exports unexpectedly declined by 2.7 percent to USD 193.49 billion, swinging from a 14.2 percent jump in the previous month and missing market estimates of a 2.3 percent growth. The latest reading on overseas sales reflected weakening global demand as well as renewed trade dispute with the US, at which higher tariffs on USD 200 billion worth of Chinese goods will soon take effect. Sales of steel products fell 2.3 percent to 6.33 million tonnes and were unchanged from the previous month. Additionally, exports of coal declined 2.0 percent to 0.50 million tonnes, and dropped 12.3 percent from March's 0.57 million tonnes. Meanwhile, sales of unwrought aluminium and aluminium products went up 10.4 percent from a year earlier to 498,000 tonnes in March, but declined 8.8 percent from February's 546,000 tonnes. Also, exports of rice jumped 112.7 percent to 357,000 tonnes and climbed 84.7 percent from the prior month's 190,000 tonnes. 

Sales declined to the US (-13.2 percent), Japan (-16.4 percent), South Korea (-7.7 percent), and Australia (-13.8 percent), while went up to Taiwan (4.6 percent), the EU (6.2 percent), and the ASEAN countries (0.4 percent).

For the January to April period, the trade surplus with the US was recorded at USD 83.66 billion.
Considering the first four months of the year, China's trade surplus widened to USD 90.16 billion from USD 70.94 billion in the corresponding period 2018.

In yuan-denominated terms, China's trade surplus came in at CNY 93.57 billion in April, as exports grew by 3.1 percent while imports expanded at a faster 10.3 percent.

China April Trade Surplus Far Below Estimates


General Administration of Customs l Rida Husna | rida@tradingeconomics.com
5/8/2019 9:14:21 AM