Japan's power saving weigh on Chinese trade

China's crude oil imports in October rose 13.8% on year to 5.6 million barrels per day, according to the customs data. The country's crude oil processing in the month was 6.7% higher than a year ago and electricity output rose 6.4% on year as well. These energy related data were relatively stronger than slump during past several months.

However, Chinese energy consumption is still significantly weaker than previously recorded two digits stable growth. Current situation is no more than barely avoiding flat or minus growth.

Since year-on-year growth of monthly China's energy demand in this year have been sluggish, let's take a look at change compared to the same months of 2010.
Growth rates of crude oil processing and processing trade amount are apparently down after April.

On the other hand, Japanese data, which are confused in case of year-on-year due to the severe earthquake, also show clear downward tendency when compared to 2010.
The reason why Japan's crude oil processing rose from a year ago in June seemed to be affected by lower Chinese crude oil throughputs due to the poor refining margin.

The notable point is continuous decrease of electricity output in Japan since March. It seemed to be caused by nationwide power saving because of a lack of power supply capacity due to the nuclear plants shutdown. Japan's entire nuclear power units were shutdown in June and resumed only two later.

China's processing trade is reducing its growth pace in step with the slowdown of Japanese power output.
The processing trade, which accounts for 35% of total trade of China, is one of the major methods to earn foreign currency for the country. The amount of the processing trade was increased by 12.7% from a year ago in 2011, but the growth rate shrinked to 2.5% on year in the first ten months in 2012. The monthly growth data compared with 2010 are in relatively lower level after April.

Chinese processing trade hit all-time record in November last year and has never exceeded after that. We can't ignore influence by Japan's sluggish power consumption against processing trade in China.
Of course, weaker demand for materials, parts and machineries from China may make Japanese manufacturers easy to cut power use.

China's total trade in Jan-Oct rose 6.3% from a year earlier, according to the customs data. The number is much lower than 22.5% on year growth in 2011. Especially, trade with Japan fell 2.1% on year and trade with EU decreased 3.0% on year during the first 10 months in this year.

China's imports from Japan in October fell 10.2% from a year ago. Media explain that the conflict between both nations over islands in the East China sea is affecting on the trade. However, Japan's exports to China had already fallen 9.2% on year during Jan-Aug period before breaking out the dispute.