China-Iran Trade Report (November 2021)
Chinese Exports Rise Further
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for November shows a huge jump in Chinese exports to Iran, further increasing the China’s trade surplus. Chinese exports to Iran totalled just under $1 billion, the highest level since April 2019, just one month prior to the Trump administration’s revocation of waivers permitting the sale of Iranian oil, a move that significantly depressed China-Iran bilateral trade. ___STEADY_PAYWALL___
The rise in November exports builds on October’s strong totals and reflects continued Iranian demand for machinery (HS Chapter 84), exports of which rose 37 percent from the previous month to reach just under $250 million. Chinese exports of transportation equipment (HS Chapter 87) likewise rose 30 percent from October to reach $154 million.
Chinese imports from Iran totalled $492 million in November, compared to $425 million in the previous month. The significant rise in Chinese exports and limited growth in imports saw China’s trade surplus rise to the highest level in 24 months. However, the rise in Chinese exports to Iran may have been enabled in part by an increase in indirect imports in Iranian oil, meaning that the real trade surplus is likely lower than customs data suggests.
Notably, Chinese imports of oil from the United Arab Emirates exceeded $3 billion in November, an staggering total. Over the last year, there has been a steady rise in Chinese imports of UAE oil, now reflected in the below chart. The import totals are now at levels that—as in the case of Malaysia—suggest a significant portion of the oil is Iranian. As reported by the Bourse & Bazaar Foundation in an October analysis, the UAE appears to be an increasingly important vector in China-Iran trade, facilitating not just Chinese imports of Iranian oil, but also the re-export of Chinese goods to Iran.
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China-Iran Trade Report (September and October 2021)
Editor’s Note: The data for September and October are being released as one report due to author availability last month.
China’s Trade Surplus Surges
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for October shows that China’s surplus in trade with Iran is at its highest level since August 2020, reflecting stable exports and a significant drop in imports over the last two months. ___STEADY_PAYWALL___
Chinese exports to Iran remained stable as Iranian buyers showed strong demand for machinery (HS Chapter 84) and transportation equipment (HS Chapter 86). Exports totalled $618 million in September, rising to $772 in the following month, the highest monthly total so far this year.
But Chinese buyers showed less interest in Iranian goods, as imports fell significantly from August’s $713 million high to just $473 million in September and $425 million in October. The drop in Chinese imports reflected lower purchases of Iranian mineral products (HS Section 5) and organic chemicals (HS Chapter 29).
The fall in imports contributed to a surge in China’s trade surplus with Iran, which totalled $346 million, the highest total since August 2020, when Iran’s economy was facing significant pandemic-related disruptions. Of course, the trade balance reflected in customs data does not include the value of Iranian oil sales to China via third countries such as Malaysia, nor does it include non-oil goods that are being sold to China via countries such as the UAE. Still, the volatility in direct Chinese imports from Iran remains a challenge for Iranian manufacturers for whom China should be a large and reliable market.
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China-Iran Trade Report (August 2021)
Total Trade Rises
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for August shows that total bilateral trade between China and Iran reached its highest level since March 2020, with the level of Chinese exports and imports both exceeding $700 million. ___STEADY_PAYWALL___
The increase in total trade can be attributed to a modest rise in Chinese exports to Iran, which rose from $654 million in July to $741 million in August, in part because of an increase in machinery sales (HS Chapter 84). The increase in total trade also reflects a more substantial rise in imports, which rose from $513 million in July to $713 million in August, the highest import total since December 2020. The increase in imports was driven by a rise in Chinese purchases of ores (HS Chapter 26) and iron and steel products (HS Chapter 72).
Indirect imports of Iranian oil rose following July’s decreased purchases attributed. to Malaysia. Total crude oil (HS Chapter 27) imports from Malaysia rose from $1.34 billion to $1.82 billion in August.
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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.
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China-Iran Trade Report (May 2021)
Customs Data Raises a Question
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for May marked imports at Iran at $551m, the highest level so far in 2021, just beating January’s import total. ___STEADY_PAYWALL___
Oil imports did not contribute to this total, with declared imports of Iranian oil remaining a negligible $5m. But customs data continues to indicate strong demand for Iranian oil, with declared imports from Malaysia reaching a staggering $3bn, a 65 percent surge from April’s total.
Looking to exports and imports directly attributed to trade with Iran, China’s trade surplus remained essentially unchanged over the month, totalling $65m in May compared to $67m in April. But looking year-on-year China-Iran trade remains below the levels seen during the first five months fo 2020. Monthly Chinese exports to Iran have averaged $593m compared to $737m at the same point last year. The monthly import average is $503m compared to $543m last year. Considering that Iran’s economy is growing at a faster rate this year than last, a question raised by this data is whether the supply chain shocks related to the pandemic spurred Iranian firms to find new suppliers, possibly through reexport, such that the relatively low level of China-Iran trade is serving as a less significant constraint on output.
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China-Iran Trade Report (April 2021)
Two Years of the “New Normal”
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for April marks 24-months since the Trump administration’s revocation of waivers permitting imports of Iranian oil, a move that led to a significant decline in China-Iran bilateral trade. ___STEADY_PAYWALL___
In the period since, Chinese exports to Iran have averaged $742m per month, less half the average level seen in the first half of 2018.
Trade figures for April remained consistent with the “new normal” with Chinese exports to Iran rising significantly from USD 457 million to USD 566 million as orders picked-up following the Nowruz holidays in March. Chinese imports from Iran fell slightly from USD 523 million to USD 499 million. With oil imports remaining at their “zero” level, the decline in imports was mostly attributable to a fall in purchases of metals products—imports in HS Section 15 fell by approximately USD 40 million.
High exports and lower imports saw China run a small trade surplus of USD 66 million based on the customs data. But oil imports from Malaysia remain near historic highs at USD 1.8 billion, meaning Iran continues to run a surplus. As negotiations continue in Vienna around the possible US reentry into the JCPOA, a key question will be to what extent China-Iran bilateral trade will react to the lifting of US secondary sanctions.
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China-Iran Trade Report (March 2021)
___STEADY_PAYWALL___China’s Deficit with Iran Widens
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for March shows China running a small trade deficit with Iran, as Chinese exports to Iran fell to USD 475 million from USD 584 million. Chinese imports from Iran rose from USD 393 million in February to USD 523 million. The increase in Chinese imports was not attributable to purchases of Iranian crude oil, which were effectively zero for the third straight month. The increase Iran was driven by a USD 88 million rise in polyethylene imports between February and March.
Meanwhile, indirect purchases of Iranian crude, not reflected in the customs data for Iran, reached new highs. China’s declared oil imports from Malaysia totalled USD 2.3 billion, an all-time high, reflecting increased demand for Iranian oil which is delivered to China via Malaysia. Taken with the increase in non-oil imports, the Iran appears to be running a sizeable trade surplus with China, a fact that bodes well following the balance of payments crisis induced by the pandemic. That Chinese exports to Iran remain below historical levels may reflect that demand is still depressed in Iran. But the economic recovery now underway, the strengthening of the rial, and the resurgence in consumer demand seen in the final months of the Iranian calendar year, may lead to an increase in Chinese exports in the next quarter.
