BEIJING- China’s exports unexpectedly surged for March, driven by strong shipments of solar products, new-energy vehicles and lithium batteries and as supply chain conditions continued to improve from their COVID paralysis.
Meanwhile, imports fell less than expected, with economists pointing to an acceleration in the purchase of agricultural products, especially soybeans, as proving some support.
Exports in March shot up 14.8 from a year ago, snapping five straight months of declines and much better than the 7.0 percent fall forecast by analysts. Imports dropped just 1.4 percent, smaller than the 5.0 percent decline forecast and a 10.2 percent contraction in the previous two months.
While the figures provide some relief for investors worried about the health of the world’s second-largest economy, analysts doubt the strength can be sustained as demand in major economies elsewhere flags.
“China’s export growth soared in March. This came as a surprise to the market,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “The positive surprise may be partly due to a low base effect – the COVID outbreaks in March last year forced many factories to shut down,” he added.
LvDaliang, spokesperson of the General Administration of Customs, attributed the upside surprise to strength in demand for electric vehicles, solar products and lithium batteries.
However, he warned conditions could worsen going forward.
“The external environment is still severe and complicated at present,” Lv told reporters in Beijing on Thursday. “Sluggish external demand and geopolitical factors will bring greater challenges to China’s trade development,” he added.
Newly appointed premier Li Qiang told a cabinet meeting last week that officials should “try every method” to grow trade with developed economies and push companies to further explore emerging market economies, such as those of Southeast Asia.
China has set a growth target of around 5 percent for gross domestic product (GDP) this year, after severe pandemic controls last year knocked the economy to one of its slowest rates in decades. Last year’s GDP rose only 3 percent.
China’s imports of iron ore grew 14.8 percent in March from the same month a year earlier as expectations of stronger demand for steel in a rebounding Chinese economy encouraged steelmakers to book more cargoes.
The world’s largest iron ore consumer brought in 100.23 million tons of the steelmaking ingredient last month, up from 87.28 million in March 2022, data from the General Administration of Customs showed.
Refinitiv vessel-tracking data showed that iron ore arrivals in China grew by 14 percent on the year to stand at 94.17 million tons last month, with about 86 percent from Australia and Brazil, the world’s top two iron ore suppliers.
The significant increase in imports of Indian origin also contributed to higher volumes last month, analysts said.
Iron ore originating from India surged by 84 percent to 2.68 million tons in March, according to Refinitiv data, after the country scrapped an export tax last November.
“There is not much increase in domestic (iron ore) output last month, so the increased usage (of the steel-making ingredient) mainly came from imports,” said Pei Hao, a Shanghai-based senior analyst at international brokerage firm FIS, ahead of the data.
“The higher overseas shipments and larger transaction volumes of seaborne cargoes (in March) also prove this,” he added.
In the first quarter of 2023, China imported 294.34 million tons of iron ore, an increase of 9.8 percent from 268.36 million over the corresponding 2022 period.
March exports of steel products were 7.89 million tons, up 59.7 percent on the year, the data showed, as domestic steel mills were motivated to ship cargoes abroad to benefit from higher overseas prices.
Steel exports in the first three months of the year grew by 53.2 percent to 20.08 million tons on the year, the data showed.
China’s imports of steel products in March sat at 682,000 tons, with total volumes of 1.91 million over the period from January to March down 40.5 percent on the year, customs said.
Coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations for a demand recovery and after curbs on bringing in Australian coal were removed.
The world’s top coal consumer brought in 41.17 million tons last month, the highest level since January 2020, data from the General Administration of Customs showed on Thursday.
That compares to an average of 30.32 million tons per month in the January-February period, and represents an increase of 151 percent from March last year.
For the first quarter of 2023, China imported a total of 101.8 million tons of coal, nearly doubling from a low base last year, the data showed.
Coal demand in China is expected to be robust in the second quarter as the economy continues to emerge from the country’s now-abandoned zero-COVID regime.
Australian coal arrivals were expected to have grown in March after Beijing removed restrictions on coal trade with Canberra.
