China makes most of a weak commodity market, boosts raw material purchase

The weakest commodity market in 25 years is proving to be a boon for China as it grapples with the slowest economic growth since 1990.

The world’s biggest user of energy, metals and grains bought a record amount of crude, iron ore, soyabeans and copper concentrate last year, when a measure of returns from 22 commodities posted the biggest decline since the 2008 global financial crisis. While China took advantage of the drop in prices to boost purchases of raw materials, it also sent some manufactured products such as steel abroad and exacerbated a market oversupply.

While persistent global glut of everything from oil to copper and soyabeans has dragged down the Bloomberg Commodity Index this week to its lowest since 1991, investors hoping for a recovery will be counting on China to continue its record purchases.