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A new report by BMO Global Commodities Research suggests that while overall Chinese trade is struggling — looking beyond headline figures, mining firms have few reasons to worry.

US trade is in freefall and total Chinese imports may be down 5% compared to last year but, says BMO, imports of raw materials and ores “continue their seemingly perpetual upward trend.”

China’s iron ore purchases in August totalled just under 95m tonnes, up 4.2% from July and 6.2% from last year, customs data showed, marking the highest level of imports since January 2018.

Iron ore imports are set to reach another record in 2019, with annualized shipments running at 1.12 billion tonnes, despite the fall in output following the deadly dam burst in Brazil in January.

Similarly, China’s imports of copper concentrate are up 10.8% in the first eight months of the year compared to same period in 2018. Unrefined copper imports are running at an annualized rate of 21.4 million tonnes, on course to handily beat 2018’s record 19.7 million tonnes. The strong performance comes despite zero growth in global copper mine supply.

Imports of bauxite, the primary ore for manufacturing aluminium, are up by more than 30% year to date and and nickel ore shipments to China have expanded by 15% in 2019.

BMO points out that even the coal trade is buoyant, despite the many import restrictions placed on the fuel by Beijing.

In our opinion, while the trade war has caused many problems for China, it has not shaken the overall commodity business model of importing raw materials, having enough process capacity and ideally exporting a small amount of finished product as an inflation hedge.

With this, Chinese sourcing of commodity raw materials remains highly strategic. Indeed, with both crude oil imports and refined product exports both rising, oil is increasingly following metal’s path in this regard.