China May Trade Surplus Larger than Expected


China's trade surplus soared to USD 41.66 billion in May 2019 from USD 23.42 billion in the same month a year earlier and easily beating market consensus of a surplus of USD 20.5 billion. This was the largest trade surplus since December last year, as exports rose unexpectedly while imports dropped the most in nearly three years.

Exports rose by 1.1 percent year-on-year to USD 213.85 billion in May, recovering from a 2.7 percent decline in the previous month and defying market expectations of a 3.8 percent fall. The rebound in overseas sales came in amid efforts from companies to rush out shipments to avoid higher US tariffs that US President Donald Trump is threatening to impose in a rapidly escalating trade conflict. Sales of unwrought aluminium and aluminium products went up 10.5 percent from a year earlier to 536,000 tonnes, and were up 7.6 percent from April's 498,000 tonnes. Also, exports of coke & semi-coke rose 4.8 percent year-on-year to 0.88 million tonnes and jumped 51.7 percent from April's 0.58 million tonnes. In addition, exports of rice surged 236.3 percent to 343,000 tonnes but fell 2.3 percent from April's 351,000 tonnes. In contrast, sales of steel products dropped 16.6 percent to 5.74 million tonnes and were down 9.3 percent from the previous month's of 6.33 million tonnes; while those of coal declined 39.6 percent to 0.32 million tonnes, and dropped 36 percent from April's 0.5 million tonnes. Exports of rare earths slumped 18.2 percent from a year ago to 3,639.5 tonnes in May and were down 15.9 from April's 4,328.9 tonnes.

Among China's largest trade partners, exports rose to the EU (6.1 percent), ASEAN (3.5 percent), Taiwan (12.8 percent), Japan (0.5 percent), South Korea (1.8 percent) and Australia (2 percent). In contrast, sales to the US fell 4.2 percent.

Imports plunged 8.5 percent to USD 172.19 billion, reversing a 4 percent advance in April and worse than forecasts of a 3.8 percent drop. This was the largest yearly drop in inbound shipments in nearly three years, a further sign of weak domestic demand that could lead Beijing to add more stimulus. Purchases of unwrought copper tumbled 24 percent year-on-year to 361,000 tonnes in May and fell 10.9 percent from April's 405,000 tonnes. Also, arrivals of iron ore fell 11 percent year-on-year to 83.75 million tonnes in May, but were up by 3.7 percent from April. In addition, inbound shipments of soybeans slumped 24 percent year-on-year to 7.36 million tonnes in May, amid higher tariff on US cargoes and following outbreaks of African swine fever. In contrast, purchases of coal surged 23 percent year-on-year to 27.47 million tonnes, and rose by 8.6 percent from the previous month ahead of the peak demand season. Imports of crude oil rose 3 percent to USD 40.23 million tonnes, but were still below April's record 43.73 million tonnes. Gas imports were at 7.56 million tonnes in May, up 3.6 percent from the same month last year but down slightly from 7.65 million tonnes in April.

Imports dropped from the US (-26.8 percent), Japan (-15.9 percent), South Korea (-18.2 percent) and Taiwan (-8.3 percent), but grew from the EU (1.8 percent), Australia (5.2 percent) and ASEAN (3.4 percent).

China's trade surplus with the United States rose to USD 26.89 billion in May, from USD 21.01 billion in April. For January-May combined, China's trade surplus with the US stood at USD 110.55 billion.

Considering the first five months of the year, the trade surplus widened to USD 130.47 billion from USD 94.36 billion in the same period last year, with exports rising 0.4 percent from a year earlier and imports declining 3.7 percent.

In yuan-denominated terms, China's trade surplus came in at CNY 279.12 billion in May, as exports grew by 7.7 percent, while imports declined by 2.5 percent.

China May Trade Surplus Larger than Expected


General Administration of Customs | Rida Husna | rida@tradingeconomics.com
6/10/2019 12:01:15 PM