Clyde Russell is a Reuters columnist. The views expressed are his own.
LAUNCESTON, Australia (Sept 8): If you were trying to distil China's commodity imports for August into a single word, that word may be cautious.
Crude oil imports rose 6 percent from a month earlier, but China was a net fuel exporter for a fourth month this year, meaning that some of the additional crude imports were shipped out as refined products.
In assessing the state of Chinese oil demand, the impact of the trade in refined products is becoming increasingly important, as the trend is now clearly toward rising net exports, particularly of diesel.
Crude imports were 5.93 million barrels per day (bpd) in August, slightly below the average of 6.03 million bpd for the first eight months of the year.
This represents a gain of 450,000 bpd over the 5.58 million bpd imported in the first eight months of 2013.
However, net fuel imports in the first eight months of last year amounted to about 246,000 bpd, while this year there are a paltry 17,000 bpd.
If the net fuel imports are added to crude imports, it takes year to date imports for 2014 to 6.047 million bpd, and to 5.826 million bpd for the same period last year, a difference of just 221,000 bpd.
This is probably a more accurate reflection of the true state of Chinese fuel demand, and even this picture may be overstated, given the likelihood that strategic storages were being filled in the first half of 2014.
What this means is that the International Energy Agency's forecast for Chinese oil demand to rise 2.9 percent in 2014 may be too optimistic, and a figure closer to 2 percent is more likely.
IRON ORE, COPPER, COAL WARNING SIGNS
Other commodity imports are also sending warning signals, with unwrought copper flat on month, iron ore dropping 9.3 percent and coal slumping 18.1 percent.
Unwrought copper imports were 340,000 tonnes in August, bringing the year-to-date total to 3.2 million tonnes, a gain of 14.3 percent from the same period last year.
This is still a relatively strong outcome, and given concern over the strength of manufacturing and housing construction, it would seem that imports are likely running ahead of actual consumption, meaning that stockpiling for financing purposes is still boosting demand.
Also worth noting is the trend shift in copper demand, with ore and concentrate imports rising 6.7 percent on month in August and 18.5 percent on year to 7.29 million tonnes.
This is statistical confirmation that Chinese copper smelters have increased capacity, and it's likely that this trend will continue.
In iron ore there are some worrying signals as well. August imports of 74.88 million tonnes were down 9.3 percent from July.
While imports are still up a strong 16.9 percent year-to-date, the concern for iron ore producers will be that Chinese steel mills are not ramping up purchases in response to lower prices, as they have done in the past.
Spot Asian iron ore <.IO62-CNI=SI> has fallen 38 percent from the start of the year to $83.60 a tonne on Sept. 5, a four-year low.
It may be that a small rally in prices between mid-June and mid-July had a negative impact on buy orders, so it will be interesting to see if the 12.5 percent drop in the price since the beginning of August acts as a spur to imports in the current month and October.
With coal there is no way to sugarcoat the import weakness.
Just 18.86 million tonnes were imported in August, down 18.1 percent from July, while year-to-date imports are down 5.3 percent to 201.76 million tonnes.
Coal is suffering because of higher hydropower demand and actions by various authorities to limit its use in a bid to combat China's high levels of air pollution, and not even prices at a four-year low is enough to boost imports.
Spot thermal coal at Australia's Newcastle port , an Asian benchmark, dropped to $67.45 a tonne in the week to Sept. 5, down 22 percent so far this year and less than half the post-2008 recession peak of $136.30 from January 2011.
The worry for commodity producers is that Chinese imports are not as responsive to price signals as they have been in the past, with lower prices not necessarily resulting in heavier buying.