China March imports to ease on slowing economy

China's imports of most commodities, including crude oil and copper, are set to slow in March from February, reflecting weaker economic activity as distortions caused by the Lunar New Year holiday dissipate, traders and analysts said on Monday.

A raft of economic data due this week from China, including first-quarter gross domestic product and trade balance, is set to show the world's second-largest economy is slowing but not crashing.

The strength of its commodities imports in March would also help to set the tone for the market for the second quarter.

Crude oil imports by China, the world's second-largest consumer, are set to fall from February's record high of 5.95 million barrels per day as top refineries shut plants for maintenance after running hard the past two months for Chinese New Year.

Crude oil throughput in March is seen to have slid to a 31-month low with daily crude runs almost 10 percent less than a month earlier, a Reuters poll showed last month, with some plants starting repairs earlier than planned to trim growing losses.

Traders' appetite for copper, widely used in electrical appliances and power cables, will have been dampened by unfavorable prices and swollen stocks at Chinese ports.

"There haven't been any arbitrage opportunities in March or  April so far. You lose money importing copper into China while the window for exports has not opened yet," said a copper trader in China, adding that higher bank lending would also have reduced the amount of imports used for financing.

Imports of copper, of which China is the world's largest buyer, jumped 17 percent from the preceding month to 484,569 metric tons in February — double the year-earlier level and carrying monthly shipments to the second highest on record.

But the surge, led mainly by financing needs, has driven copper stocks in Shanghai bonded warehouses to 650,000 metric tons by the end of March, according to trade estimates, while stocks monitored by the Shanghai Futures Exchange also hover around a decade high of more than 220,000 metric tons.

With bulging stocks and a slowing economy, a key question for the global metals markets now is how strong China's second-quarter demand for copper will be.

James Luke, an analyst at China's CICC, said even though a seasonal demand recovery would help draw down some stocks in coming months, net imports in the second quarter would still fall from a year ago, as weak domestic prices would spur  traders to re-export more of the refined copper.

China's iron ore imports in March are also expected to fall from February's figure of 65 million metric tons, their highest level since Jan 2011. But expectations of improved steel demand will keep volumes strong.

"Shipments from the three major miners are still increasing, and steel mills are also builAir Jordan VII 7 Shoes