There were a lot of interesting trends in the June monthly and half yearly economic figures, beyond the headline grabbing data on growth, trade and inflation.

In fact the small nuggets of information confirm not only the slowing trend, but that it is not all that damaging, or disruptive.

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Looking at imports and production, we find that in some key areas, such as copper and aluminium, domestic production continued to rise in June, while imports were lower, or up after a couple of falls.

Oil imports fell after five strong months, but production was higher. Cement production rose, as did car output and sales, after two weak months.

And take for example the most important indicator for Australia: China's appetite for iron ore and coal, which in turn manifests itself in the monthly data on the country's steel production.

June output was 59.93 million tonnes, 11.9% higher from the same period last year and a couple of hundred thousand tonnes under the 60.25 million tonnes produced in may (which was a monthly record).

Looked at another way, China's crude steel output hit a record daily high in June for a second month in a row.

Analysts says steel output is being supported by plans to build 10 million units of public housing units for low-income families this year

Daily crude steel output rose to nearly 1.998 million tonnes on average in June, up 2.8% from May and 11.9% higher year-on-year, according to the bureau.

Iron ore imports in June also dipped 4.1% to 51.09 million tonnes, compared with 53.30 million tonnes in the preceding month.

But imports were around 8% above the 47 million tonnes imported in June of last year.

And media and industry reports say there's been a sharp fall in iron ore stocks in China, so higher imports are being talked about in the next month or so, despite July and August a time of low demand for seasonal reasons.

China's coal exports continued to fall, but imports rose for the fourth month in a row, another bull point.

That's despite higher coking and thermal coal prices because of the Queensland floods.

According to the monthly figures China's coal exports fell to the lowest level since January 1994, down 19% on May to just 700,000 tonnes.

Total exports in the June half were 8.8 million tonnes, down 13% or than the corresponding period last year.

After hitting a 2 year low in February, Chinese coal imports increased for the fourth consecutive month in June, to 13.61 million tonnes, barely above the 13.4 million tonnes in May.

However, total imports in January-June of this year of 70.7 million tonnes were still down 4% year-on-year because of the slump in the first couple of months.

Iron ore output in the world's largest steel producer also hit a record 124 million tonnes in June, up 21% from May and 27.3% higher from a year earlier.

Chinese iron ore is cheaper, but actually more expensive to use than Australian and Brazilian ore (and from India for that matter) because of their higher iron content which means more crude steel can be produced by using them at a lower unit price.

Another bullish point was the 13.5% rise in China's power generation in the June half from a year earlier.

China's electricity output reached 396.8 billion kilowatts-hours in June, up 16.2% year-on-year.

That is despite reports of power shortages and blackouts and drought affecting supplies of hydro power and coal prices forcing some smaller power companies to cut back.

Bank lending is another important indicator and it rose in June after a very sharp fall in May.

China's new bank lending rebounded to 633.9 billion Yuan ($US97.52 billion) in June from May's 551.6 billion Yuan. The June figure was also 20.7 billion Yuan more than that of last June.

In the first half of this year, the country's financial institutions lent 4.17 trillion Yuan in Yuan-denominated loans, 449.7 billion Yuan less than the same period of last year.

Copper imports, and production are another set of indicators watched closely.

Up till June copper imports are been falling (both of metal and concentrates) and this was taken to confirm the slowdown in industry.

But China's copper staged a strong comeback in June, but the outlook was marred by falls in a list of other key commodities, showing that Beijing's cooling measures were weighing on the economy.

Copper imports ended two months of decline to rise 9.9% to 280,009 tonnes in June. But imports of unwrought copper fell 17.3% to 328,000 in June from June 2010.

But June's volumes were still down 14.7% down from June, 2010 and total copper imports of 1.7 million tonnes for the first six months of 2011 was nearly 24% under the same period of last year, a big drop.

Imports of unwrought aluminium, including primary, alloy and semi-finished aluminium products, fell by 13.9% to 64,491 tonnes. China had imported 74,880 tonnes in May.

On the negative, China's crude oil imports fell 11.5% from a year ago to their lowest in eight months (since last November), while aluminium imports fell about 14%, and soybeans shed 5.7% from May.

Crude oil production in June rose 1.6% from a year earlier to 17.15 million tonnes.

Customs figures showed that although the volume of China's crude oil imports have only risen 7% from a year ago, the surge in international oil prices had jacked up import costs by 42.5%.

And China's production of refined copper, nickel, primary aluminium and its precursor raw material alumina hit monthly records in June.

Refined copper production rose 8.7% on the month to 477,000 tonnes in June after posting a 3.3% drop in May.

The June 2011 output was a 12% rise from June 2010 and 1.5% higher than the previous record of 470,000 tonnes in March 2011.

In the first half of 2011, refined copper production rose 13.9% on the year to 2.644 million tonnes.

By cutting the import of higher priced copper from offshore and lifting production, Chinese producers obviously used up stocks and bought more concentrates and scrap internally, thereby protecting profit margins.

And in aluminium it was a similar story with primary aluminium production in China rising 3.6% from may in June to a fourth consecutive record at 1.591 million tonnes. That was also up 13.3% from a year ago due to new capacity.

In the first half of 2011, aluminium output rose 5.6% on the year to 8.643 million tonnes.

In June, alumina production rose less than 1% to a third consecutive record at 3.143 million tonnes, up 29.3% from June 2010.

In the first half of 2011, alumina output surged 17.8% on the year to 17.486 million tonnes.

Nickel output hit a second consecutive monthly record at 27,015 tonnes in June, up 19.9% from May 2011 and 48.2% from June 2010.

In the first half, nickel output surged 44.2% on the year to 135,321 tonnes.

Production of refined lead and zinc also rose in June from May.

The world's largest soy importer also imported 4.3 million tonnes of soybeans in June, down 5.7% from the previous month and nearly 31% down from a year ago when imports were lifted to try and control inflation.

Total imports in the first half fell 8% to 23.71 million tonnes, but the import bill jumped 19.8% because of higher world prices.

This data is not from an economy roaring ahead, or heading for a crash landing.

There is evidence of a slowing in demand and output, but so far it's controlled and supports the slow easing in growth to 9.5% in the three months to June, which is a long way from the hectic 11.9% boom at the start of 2010.

Copyright Australasian Investment Review.
AIR publishes a weekly magazine. Subscriptions are free at www.aireview.com.au

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