- China's major commodity trade data for May shows strong price-driven characteristics, with crude oil imports falling to an eight-year low of 7.79 million barrels per day due to supply tensions and soaring physical premiums triggered by geopolitical conflicts.
- The high international copper prices and the significant rise in Indonesian thermal coal prices driven by geopolitical conflicts have notably suppressed China's domestic demand for industrial metals and non-clean energy imports. In May, imports of unwrought copper and coal both showed varying degrees of year-on-year and month-on-month declines.
- Benefiting from supply chain disruptions in the Middle East caused by geopolitical conflicts and high global aluminum prices, Chinese aluminum producers significantly increased their export scale in May, with exports of unwrought aluminum and aluminum products reaching a new high for the year.
Crude Oil Imports Drop to Eight-Year Low
The latest data from Chinese customs shows a significant reduction in crude oil imports in May, with the daily import level dropping to 7.79 million barrels. This change is mainly influenced by the Iran war that broke out on February 28, with the Strait of Hormuz effectively under blockade, posing a risk of global crude oil supply disruption. Affected by this, Saudi Arabia raised the physical premium for Arab Light crude oil shipments in May. Facing the substantial increase in physical crude oil costs, Chinese refiners chose to actively reduce import volumes and instead consume the large inventories accumulated during previous years of low oil prices and through the purchase of heavily discounted sanctioned crude oil.
Industrial Metal Imports Under Pressure from High Prices
Under the influence of global market price fluctuations, China's procurement strategy for major industrial metals has shown a clear divergence. London copper futures (CA1!) remained high in May, closing at $13,615 per ton on Tuesday, with a year-to-date increase of 9.6%. The high procurement costs suppressed the purchasing willingness of domestic end-manufacturers, leading to a 1.3% month-on-month decline in imports of unwrought copper and copper products to 446,000 tons in May. The cumulative import volume for the first five months of the year further declined by 7% year-on-year to 2.01 million tons. If high inflation and supply chain constraints persist, the import scale of non-ferrous metals may be further reassessed in the coming months.
Aluminum Exports Surge Due to External Premiums
In contrast to the sluggish copper imports, Chinese aluminum producers are actively leveraging the high external market price environment to expand exports. Due to the severe disruption of the aluminum supply chain in the Middle East caused by the Iran war, international aluminum prices have been significantly boosted, with London aluminum futures (AH1!) closing at $3,547.50 per ton on Tuesday, having risen by 13% since the conflict began. Against this backdrop, China's exports of unwrought aluminum and aluminum products reached 632,000 tons in May, setting the highest monthly record in nearly a year, up 5.7% compared to the same period in 2025. The cumulative export volume for the first five months of the year also jumped 10.4% year-on-year to 2.69 million tons, demonstrating the domestic capacity's rapid ability to fill the global supply-demand gap.
Comprehensive Structural Adjustment in Energy Commodity Imports
Apart from crude oil, coal procurement is also strongly constrained by price factors. China's coal imports in May fell by 8% year-on-year to 33.27 million tons, with the cumulative import volume for the first five months down 3.2%. As a core procurement variety for Chinese power companies, Singapore Exchange Indonesian thermal coal futures (S42CFc1) were reported at $65.13 per ton on Tuesday, having risen by 43% since the end of last year, with most of the increase concentrated after the conflict occurred. If major Asian economies continue to reduce natural gas procurement and switch to coal alternatives, regional coal prices may be further pushed up, prompting Chinese buyers to adopt more cautious dynamic inventory management strategies in the future.
