Reuters reported that China key commodity imports including crude oil, copper and iron ore all climbed in August from the previous month adding to evidence that demand in world second largest economy was still going strong despite the economic turmoil in the West.

The wave of buying of oil and industrial commodities suggests that Chinese companies remain confident about the domestic economy and that they would likely see any price corrections as a rare restocking opportunity a move which should offer strong support to commodity prices.

With China inflation having pulled back in August from a three year high market watchers also expect the central bank to hold off further tightening measures which could in turn ease the credit crunch and potentially draw producers and traders to import more raw materials.

According to Reuters calculations using the revised July numbers China imported 21.04 million tonnes of crude oil in August up by 1.8% from the 20.66 million in the previous month. Although implied oil demand in August slipped to the lowest rate this year plant maintenance and accidents were the main reasons behind the dip and traders generally expect demand to improve from September.

A crude oil trader said “August-arrival crude cargoes were mostly loaded in June and July when oil prices fluctuated a lot.”

Data from the General Administration of Customs also showed China iron ore imports in August jumped 33% from a year ago to a five month high of 59.09mn tonnes, thanks to the steel sector robust production.

However, analysts have cautioned that steel output could decelerate in the coming months amid a seasonal demand slowdown.

Despite slowing export growth due to the economic malaise in the US and Europe, China economy has continued to grow at an enviable clip of over 9%, thanks in part to the government construction of over 10 million houses as well as feverish investments in the less developed mid and western provinces.

(Sourced from Reuters)