In September, Chinese imports of commodities remained strong, showing signs of recovery in the economy, while traders anticipated further stimulus from Beijing. Typically, during the autumn, construction and factory activity picks up after a summer lull, which contributes to a narrowing of the decline in China's total imports. This also supports the demand for industrial fuel and materials, as revealed by customs data released on Friday.

Nevertheless, the latest inflation data, which indicates that consumer prices remained stable in September and producer prices continued to decline, suggests that additional policy support may be necessary to sustain economic growth.

Energy Products:

Coal shipments decreased from the record high set in August to 42.1 million tons due to cooling weather and reduced air-conditioning needs. Despite this decline, it was still the third-largest monthly shipment ever. This was due to stockpiling for peak winter demand and domestic supply pressure resulting from safety inspections in mines, which helped maintain robust volumes despite relatively subdued international prices.

Natural gas imports remained above 10 million tons, supported by winter stockpiling and low prices. However, crude oil purchases slowed to 45.7 million tons as buyers reduced stockpiles in response to smaller-than-expected import quotas.

Metals Markets:

Iron ore imports remained above 100 million tons for the second consecutive month, representing a 6.7% year-on-year increase. This can be attributed to a shift towards lower-grade iron ore, which requires more ore to produce the same amount of steel, as well as increased infrastructure spending and strong manufacturing demand, particularly in sectors like automobiles.

Imports of unwrought copper and related products reached their highest level this year, driven by investments in the power grid and renewable energy demand. However, ore shipments decreased from the record high set in August. ANZ Group Holdings noted that a renewed focus on electric vehicles and power grid expansions is expected to boost downstream metals demand.