China commodity output surges but imports lag

China's production of metals, fuel and power stayed at record levels last month as industrial output hit a 19-month high, but falling imports of copper and iron ore fuelled doubts whether it really needed so much material.

As so often in the past year, calendar-related blips in the data and the inexact influence of China's huge stockpiles have obscured the true picture of demand for each commodity, making it hard to judge if China's growth is solid or hollow.

At least production seemed to rocket from last October: power generation up 17 percent, its fastest rise in 19 months; steel volumes up 42 percent; copper production up 28 percent; output of naphtha, a chemical feedstock, up 37 percent.

But the figures released on Wednesday were flattered by comparisons with last year's slump, when the global financial crisis first took a bite out of China's economic miracle.

Still, Chinese production of many of the ingredients demanded by its economy -- reinforcing steel bars for construction, diesel for transport, copper and aluminium for manufacturing -- scaled new heights this year, and output rates barely fell in October.

The country's leading flat steel producers, Baosteel (600019.SS) and Wuhan Iron and Steel (600005.SS), have raised their prices for December sales, sources said on Wednesday, which analysts said could also point to a robust industrial economy.

"The data are expected to remain strong in the rest of the year, as the steel mills are still enjoying marginal profits, so they are not likely to cut production, supporting ore demand," said Hu Kai at industry consultancy Custeel.

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