Chinese Customs Statistics

Analyst UBS gives the following observations about Chinese Customs statistics: UBS took the following approach, by applying an age old trading mantra: "The Trend is Your Friend" while reviewing 2006 and looking towards 2007 prospects. Thermal coal, copper, platinum, cement, oil, pulp and fertilisers continue to be strongly supported by Chinese trade over 2006 and into 2007. January saw China become a net thermal coal importer for the first time ever; copper metal imports in Jan were 90kt/month higher than lows experienced 6 months ago. January oil imports were up 25% m/m. Global balances in zinc, alumina, aluminium, steel and PVC remained troubled. Zinc metal exports and alumina import trends challenge global markets. 2006 saw rising exports in aluminium product and steel while PVC imports were the lowest in the last 10 years in 2006. Iron ore imports surged in January as freight prices continue to reflect strong nearby iron ore import demand. Rising nickel ore and bauxite imports were key changes in 2006 when contained nickel in ore rose 135% y/y to 45kt. Coking coal and coke prospects remain subdued while paper and board imports eased 16% y/y in 2006. Coal equities Shenhua and Yanzhou, global miners BHP Billiton and Xstrata and cement equities such as Holcim and Grasim are well supported by China's materials trade in 2006-07.