China's imports of key commodities, such as iron ore and copper, defied expectations for a monthly fall to stay high in July, but weak trade figures and a nine-month low in crude oil imports painted a picture of a slowing economy.
China is the world's second-largest oil consumer and the top buyer of iron ore, coal and several industrial metals, with investors and miners around the world relying on its appetite to prop up commodities prices hit by sluggish demand from the US and Europe.
Analysts said an unexpected monthly rise of 6 per cent in copper imports in July and a slight 0.8 per cent fall in shipments of iron ore belied broader signs that China's economy was slowing swiftly, as it confronts slowing demand from its top trade partners, the EU and the US.
"I would not link an increase in Chinese copper imports to domestic demand because I don't see demand improving from here, it's actually very soft," said Judy Zhu, a commodities analyst at Standard Chartered Bank in Shanghai.
"A lot of imports are under term contracts so they have to import anyway, and this could result in bonded stockpiles rising."
Tumbling July spot prices of steel, iron ore and coal, which are leading indicators of industrial activity, underscored that China's demand for commodities had weakened further in the third quarter, raising doubts about whether growth is bottoming out.
"I expect to see bigger declines in imports in August and September. We've already seen production cuts among steel companies and even the larger ones have also scaled back output," said Helen Lau, a senior analyst with broking house UOB-Kay Hian.
"More importantly, there are no signs of improvement in steel demand, so steel mills will probably keep inventory of iron ore low."
Data today also showed China's exports in July rose by just 1 per cent from a year ago, undershooting forecasts by a big margin, to register the weakest growth since January. Shipments to the European Union dropped more than 16 per cent.