Shanghai, 11 January 2012, Reuters

China's imports of crude oil and key industrial commodities proved resilient in December, with copper shipments bucking expectations and rising about 13 percent on the month to a record high. But analysts said the headline numbers did not reflect actual consumption, with the figures likely distorted by a rush to stock up ahead of the Lunar New Year holiday in January, fulfillment of term contracts and use of copper as a financing tool.

Instead, analysts pointed to the marked slowdown in the country's trade growth -- and a sharp deceleration in import growth -- as a warning of the challenges facing the world's second largest economy in the coming months. "Going forward, imports will fall because fundamental demand will be quite flat in 2012 because of weak domestic consumption and exports," said Henry Liu, head of commodities research at Mirae Asset Securities.

"But we're not going to see a collapse in demand because I think China will be able to make a soft landing." China's annual exports grew 13.4 percent in December, the slackest pace since November 2009 -- excluding the volatile month of February last year when the Lunar New Year holiday disrupted activity. Import growth slowed to a 26-month low of 11.8 percent, below the 17 percent forecast.

China's crude oil imports in December rose five percent from a year earlier to 5.16 million barrels per day, easing off from November when imports hit their second-highest level on record. For the whole year, China brought in 253.78 million tonnes of crude oil, up 6 percent over 2010.

BULK COMMODITIES

China's imports of unwrought copper and semi-finished copper reached a record 508,942 tonnes in December, bringing full-year imports to 4.07 million tonnes, down 5.1 percent from year ago. While the red metal, used in electrical wiring, plumbing and construction, has traditionally been seen as one of the best indicators of industrial demand, experts said China's massive imports in recent months have been driven by financiers.

"The main reason should be imports for financing purposes. Importers may have been able to obtain letters of credit a bit easier than in previous months near the year-end, boosting their spot buying," said Zhang Ao, an analyst at Minmetals Futures.

Iron ore shipments in December also stayed near 10-month highs at 64.09 million tonnes, as lower prices encouraged steel mills to beef up their stockpiles amid a 30 percent drop in ore prices from mid-September to early November.

But with China's property sector, a key driver of ore demand, still mired in a slump, analysts said imports in the coming months would start to decline. Separately, soy imports in December fell from the preceding month to 5.42 million tonnes, bringing full-year imports to 52.64 million tonnes.

Ends --

By Fayen Wong, Reuters - for Commodities Now