China Trade Unveiled - ANZ
Analysts at ANZ noted that the trade balance for China and April was $45.6 billion, which was better than expectations.
"However, this was mainly due to weaker imports and the continued depreciation in the yuan. Local export returns rose 4.1% y/y in April and year-to-date are back only 2%. This might not seem too awful, but with the yuan back 4.5% this year it highlights an even softer global demand backdrop. Imports also fell 5.7% y/y in local terms in April.
The first four months saw imports of commodities rising in volume but not in
value. According to Customs, China bought 325m tons of iron ores (+6.1% y/y), 124m tons of crude (+11.8%) and 1.88m tonnes of copper (+23.1%) but their import prices fell 24.9%, 35.3% and 16.2% respectively.
Imports of coal dropped 2.5% and 21.5% in volume and average price respectively. Unless these prices surge sharply in the near term, the value of China's imports is unlikely to pick up. All up, April's trade data is unlikely to have a major impact on the PBoC’s exchange rate policy as the government attributes the sluggish trade figures to the weakness of global demand."