China-Iran Trade Report (June 2021)
Metals Imports Surge
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for June marked imports at Iran at $581m, an increase of $30m from the May total, which had been the highest level achieved so far this year. ___STEADY_PAYWALL___
Chinese imports of Iranian metals, primarily iron and steel, (HS Section 15) reached $205m in June, more than twice the May total and significantly above the level of $129m registered in September 2020 in which marked the highest monthly import total since at least 2018. Record global steel prices are likely making Iranian products more attractive, despite the headaches surrounding importation. For Iran, the impact of the bumper sale of metals products to China was dampened somewhat by a decrease in Chinese imports of plastics (HS Section 7) and mineral oils products (HS Section 5).
Chinese imports of Iranian oil continued to follow their recent pattern. With declared imports from Malaysia down by $300m from their historic high in May to reach $2.7bn. The high levels of Iranian oil making their way to China have once again led to speculation that the Biden administration is weighing up sanctions on Chinese traders and refiners should the nuclear talks fail and should China continue sourcing Iranian crude despite their failure.
Chinese exports to Iran increased for the third straight month, rising to $660m from $616m in the previous month. Chinese exports of machinery and mechanical appliances (HS Section 16) rose for the fourth straight month, reaching $245m. Demand for goods in this category tracks output levels in Iran’s manufacturing sector—the increase in exports in this category supports data from Iran, such as purchasing managers’ index data, showing a general return to economic growth. However, recent electricity blackouts, which have interrupted operations at many Iranian industrial facilities, including Iranian steel producers, could depress demand for these goods in the coming months while also limiting supply for export markets.
