China’s commodity inventories are building up rapidly, indicating that demand for power and steel is slowing as the economy cools.
As of Wednesday, coal stockpiles stood at 8.7 million metric tons at Qinhuangdao port, China’s biggest coal port in Hebei province, up 40 percent year-on-year, statistics from Wind Information show.
“The inventory level is the highest so far this year,” said Xiao Xinjian, industry analyst at the Energy Research Institute, which is affiliated with the National Development and Reform Commission.
“But destocking will begin as electricity demand peaks,” Xiao said…
Power use has been growing slowly as industrial activity weakens. But customs statistics show that coal imports skyrocketed 90 percent year-on-year in April, as international coal prices fell faster than domestic ones.
Inventories of iron ore, a raw material for steel production, are also running at high levels partly because of slowing demand for steel.