Bloomberg: China Buys Record Oil, Iron Ore Volumes as Plants Lift Output

China Buys Record Oil, Iron Ore Volumes as Plants Lift Output

China bought record volumes of oil and iron ore in July as automakers, steel producers and builders expanded output to meet rising demand driven by the nation's $586 billion stimulus spending. Oil imports jumped 18 percent to 19.6 million metric tons, and iron ore purchases rose 5 percent to 58.1 million tons from a month ago, the Beijing-based customs said today in a statement on its Web site. The second-largest energy user and biggest iron ore buyer spent a combined $13.8 billion on the commodities. Record lending and public-work spending in China have lifted industrial output, boosted sales at General Motors Co. and spurred a 60 percent jump in property sales. The nation's biggest refiners will boost diesel and gasoline output this month to meet demand from the auto and fishing industries, said China Petrochemical Corp., also known as Sinopec Group. "This is a very bullish number and supportive for global oil prices," said Gordon Kwan, head of regional energy research at Mirae Asset Securities Ltd. "Successive months of robust automobile sales following the implementation of the economic stimulus measures," is triggering the oil import boom, he said. Crude steel production in China, the world's biggest maker, surged 13 percent last month to 50.7 million tons, the National Bureau of Statistics also said today at a briefing in Beijing. That's the third consecutive record monthly high, according to Bloomberg data. Iron ore is used in steelmaking. "Iron ore restocking pushed up the imports and prices as the stimulus package drives up steel demand," said Helen Wang, a Shanghai-based analyst with DBS Vickers Hong Kong Ltd., "Steelmakers have the motivation to ramp up production with higher steel prices. "Benchmark Chinese steel prices have soared 30 percent since April, and Baosteel Group Corp., China's largest steelmaker, can't meet "explosive" demand, JPMorgan Chase & Co. said last week. The steel revival has hampered China's ability to bargain down iron ore prices paid to Rio Tinto Group, Vale SA and BHP Billiton Ltd., and indicates imports of the raw material will keep rising. (Bloomberg)