China-Iran Trade Report (March 2023)
Chinese Exports to Iran Surge
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for March 2023 shows a significant jump in Chinese exports to Iran. Exports totalled $1.5 billion—the highest monthly value since May 2018. However, March’s record-high exports are likely to be an outlier, with monthly exports expected to stabilise around $1 billion.
Electrical appliances (HS Chapter 85) drove March’s exceptional surge in the value of Iran’s imports from China. Tehran bought $522 million worth of Chinese electric machinery and parts, more than three times the monthly average recorded in 2022. Of this total, $427 million is categorised as “telephone sets, including smartphones and other telephones for cellular networks.” The figure is so high it seems like it could be an error.
In the same month, China exported $280 million of vehicles (HS Chapter 87) to Iran, returning to levels last seen before the Trump administration abandoned the JCPOA and reimposed secondary sanctions in 2018.
In March, Chinese imports from Iran totalled $445 million, consolidating the positive trend that followed December 2022 low point. Beijing imported $101 million of ores, slag, and ash (HS Chapter 26). March’s import of copper (HS Chapter 74) grew 152% compared to February, totalling $116 million. Consistently with the trend that began in July 2022, the value of Chinese declared imports of Iranian oil remained zero.
Following January and February seasonal contraction, China’s crude imports from the UAE and Malaysia recovered to $2.94 billion and $3.7 billion, respectively. In recent years, China has used the UAE and Malaysia as intermediaries to import undeclared Iranian oil. Beijing also reportedly uses Malaysia as a transfer point for Russian and Venezuelan crude. Iran’s oil continues to hold its share in the supply basket of Chinese teapot refineries despite the growing competition of the heavily discounted oil offered by Russia.
Record-high exports to Iran and the absence of declared oil imports further impacted the China-Iran trade balance, with Tehran continuing to run a trade deficit with Beijing.
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China-Iran Trade Report (January and February 2023)
Trade Falls As China Celebrates New Year
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for the first two months of the year show a typical seasonal contraction in China-Iran trade associated with the Chinese New Year holidays, which began on February 1. But while the seasonal decline in Chinese exports to Iran was in line with that seen in January and February 2022, Chinese imports from Iran remain below levels seen last year.
In January, bilateral trade totalled $1.26 billion, in line with the last two months of 2022. In February, the value of bilateral trade dropped by 34 percent to $842 million. The persistent absence of declared oil imports from Iran continued to drive the trade balance in China’s favour.
Chinese exports to Iran halved from $921 million in January to $489 million in February. The decline can mostly be attributed to a fall in Iran’s purchase of Chinese machinery (HS Chapter 84), electrical equipment (HS Chapter 85), and vehicles and transportation equipment (HS Chapter 87). Exports in these three categories totalled $307 million in February, $224 million less than in prior month.
China’s imports of Iranian goods saw less movement between January ($336 million) and February ($352 million) and showed a small improvement from December’s low point. In February, China imported $93 million worth of organic chemicals (HS Chapter 29) from Iran, more than double compared of January. Declared oil exports remain negligible.
In the first two months of 2023, China’s crude imports from the UAE and Malaysia dropped significantly after the record high levels recorded in December 2022. Such a contraction is consistent with the seasonal drop in demand due to the Chinese holidays. It does not suggest a change in China’s use of the UAE and Malaysia as intermediaries to import undeclared Iranian oil.
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China-Iran Trade Report (December 2022)
Chinese Imports from Iran Decline Again
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for December 2022 shows a continued decline in Chinese imports from Iran, with non-oil imports falling below $300 million.
In December, China’s imports of ores, slag, and hash (HS Chapter 26) from Iran dropped significantly to $27 million. Compared to November, Iran tripped the value of copper (HS Chapter 74) exported to China, totalling $47 million. Overall, Chinese imports from Iran continued to decline, falling to a new 24-month-low of $311 million.
Despite doubling to $12 million, the value of Chinese declared imports of Iranian oil remained negligible. However, China’s crude imports from the UAE and Malaysia continue to grow, and reached a 24-month-high of $4.14 and $4.27 billion, respectively, in December. In recent years, China has used the UAE and Malaysia as intermediaries to import undeclared Iranian oil. Beijing also reportedly uses Malaysia as a transfer point for Russian and Venezuelan crude. December’s high oil imports from Malaysia and, especially, the UAE suggest that Iranian crude is retaining its share in the supply basket of Chinese teapot refineries despite the competition of Russian oil, probably owing to the recovery in Chinese demand.
In December, Chinese exports to Iran totalled $893 million. After November’s high-water mark, the value of electrical appliances (HS Chapter 85) imported by Iran declined to $79 million, a 77% drop compared to the month before. Similarly, in December, Tehran’s imports of base metals (HS Section XV) experienced a 24% decline month-on-month, totalling $65 million. Chinese exports of vehicles (HS Chapter 87) to Iran totalled $162 million, in line with November’s totals.
In 2022, the total value of Chinese exports to Iran reached $9.47 billion, while imports from Iran totalled $6.36 billion. Compared to 2021, the value of the China-Iran bilateral trade rose by approximately $1 billion, entirely reflecting the growth in Chinese exports to Iran. The persistent absence of declared oil imports from Iran continues to drive the trade balance in China’s favour.
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China-Iran Trade Report (November 2022)
Surge in Chinese Exports
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for November 2022 shows a surge in Chinese exports to Iran, moving Tehran’s trade deficit back to July 2022 peak level.
In November, Chinese exports to Iran totalled $935 million, marking a 50% increase compared to October. November’s growth was mainly driven by the export of electric appliances (HS Chapter 85) to Iran. Total exports in this category rose to $240 million—a level last seen in the first quarter of 2018.
In November, Chinese imports from Iran declined further, falling to a 24-month-low of $326 million. Although the current trend reflects China’s zero oil imports from Iran, Chinese imports of ores, slag, and ash (HS Chapter 26) and organic chemicals (HS Chapter 29) declined substantially compared to October 2022. In November, the value of imported plastic articles (HS Chapter 39) fell to $139 million, the lowest monthly level this year. China’s early December decision to relax the zero-COVID policy will represent an import test for Sino-Iranian trade: Iranian exports to China may rise following the anticipated resurgence in Chinese domestic demand.
Consistently with the trend that began in July 2022, the value of Chinese declared imports of Iranian oil remained close to zero in November. However, China’s crude imports from the UAE and Malaysia continue to grow, reaching a 24-month-high at $4.13 and $3.96 billion, respectively. In recent years, China has used the UAE and Malaysia as intermediaries to import undeclared Iranian oil. Malaysia is also reportedly used by Beijing as a transfer point for Russian crude. November’s high oil imports from the UAE and Malaysia suggest that Iranian crude is retaining its share in the supply basket of Chinese teapot refineries despite the competition of Russian oil.
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China-Iran Trade Report (October 2022)
Soft Demand in Iran
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for October 2022 shows a significant contraction in China-Iran trade, which fell to a monthly total of $1.04 billion, the lowest level since February 2022.
In October, Chinese imports from Iran fell to a 24-month-low of $365 million, continuing the negative trend that began in September. While Chinese imports of ores, slag, and ash (HS Chapter 26) tripled compared to the previous month, rising to $82 million, October’s lower import total reflected significant reductions in the value of imported plastic articles (HS Chapter 39) and copper (HS Chapter 74).
For the fourth consecutive month, the value of Chinese declared imports of Iranian oil remained close to zero. After the sharp decline observed in September, Chinese oil imports from the UAE settled at $3.78 billion in October. At the same time, the value of crude China imported from Malaysia dropped by one-fifth compared to September, settling at just under $3 billion. China has traditionally used the UAE and Malaysia as intermediary countries to import undeclared Iranian oil, with the Southeast Asian country reported to be also used by Beijing as a transfer point for Russian crude. After September’s significant contraction, October’s recovery in oil imports from the UAE may reflect the resilience of Iran’s crude in the supply basket of Chinese teapot refineries. Iranian exporters will be hoping that the forthcoming change in China’s zero-COVID policy might lead to a recovery in China’s economy, and thereby greater demand for Iranian goods.
Chinese exports to Iran consolidated the negative trend observed in September data, settling at $673 million. This marks a 30% decline compared to levels seen in July and August of this year. The value of exported articles of iron and steel (HS Chapter 73) dropped to $26 million, 47% less than the previous month. The value of machinery and electrical appliances (HS Section XVI) exported from China to Iran also fell, settling at $228 million. However, the export of Chinese-made cars and other vehicles (HS Chapter 87) to Iran registered a small rebound, rising 13% from September’s 6-month low. Lower levels of Chinese exports to Iran may reflect softening demand in Iran, as national protests hit economic sentiment in October.
In October, Chinese imports from Iran fell to a 24-month-low of $365 million, continuing the negative trend that began in September. While Chinese imports of ores, slag, and ash (HS Chapter 26) tripled compared to the previous month, rising to $82 million, October’s lower import total reflected significant reductions in the value of imported plastic articles (HS Chapter 39) and copper (HS Chapter 74).
For the fourth consecutive month, the value of Chinese declared imports of Iranian oil remained close to zero. After the sharp decline observed in September, Chinese oil imports from the UAE settled at $3.78 billion in October. At the same time, the value of crude China imported from Malaysia dropped by one-fifth compared to September, settling at just under $3 billion. China has traditionally used the UAE and Malaysia as intermediary countries to import undeclared Iranian oil, with the Southeast Asian country reported to be also used by Beijing as a transfer point for Russian crude. After September’s significant contraction, October’s recovery in oil imports from the UAE may reflect the resilience of Iran’s crude in the supply basket of Chinese teapot refineries. Iranian exporters will be hoping that the forthcoming change in China’s zero-COVID policy might lead to a recovery in China’s economy, and thereby greater demand for Iranian goods.
Chinese exports to Iran consolidated the negative trend observed in September data, settling at $673 million. This marks a 30% decline compared to levels seen in July and August of this year. The value of exported articles of iron and steel (HS Chapter 73) dropped to $26 million, 47% less than the previous month. The value of machinery and electrical appliances (HS Section XVI) exported from China to Iran also fell, settling at $228 million. However, the export of Chinese-made cars and other vehicles (HS Chapter 87) to Iran registered a small rebound, rising 13% from September’s 6-month low. Lower levels of Chinese exports to Iran may reflect softening demand in Iran, as national protests hit economic sentiment in October.
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China-Iran Trade Report (September 2022)
Iranian Oil Getting Squeezed
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for September 2022 shows a significant drop in Chinese exports to Iran. While the decline in exports helped to level the trade balance, September data show a contraction in the China-Iran trade sharpened by the apparent decline in Chinese imports of Iranian oil via third countries.___STEADY_PAYWALL___
In September, Chinese imports from Iran settled at $415 million. The decline compared to August was driven by a significant reduction in Chinese imports of non-oil mineral products (HS Chapter 25) and organic chemicals (HS Chapter 29). The decline was partly compensated by slight growth in the value of imported plastic articles (HS Chapter 39), which reached $213 million, and aluminium (HS Chapter 76).
For the third consecutive month, the value of Chinese declared imports of Iranian oil remained close to zero. In August, Chinese oil imports from Malaysia peaked at an unprecedented value of $3.8 billion, confirming the growth trend that began in May 2022. At the same time, the value of crude China imported from the UAE, one of the intermediary countries through which China imports undeclared Iranian oil, dropped to a 12-month low at a value of $2.1 billion. When combined, the value of Chinese imports of Malaysian and UAE oil in September was $1.1 billion lower than in August. Consequently, for the first time since the beginning of the Russian invasion of Ukraine, the data may reflect the impact of Russian discounted oil marketed to Chinese teapot refineries which had previously been buying Iranian oil.
Chinese exports to Iran fell significantly, settling at $752 million. The value of exported machinery and electrical appliances (HS Section XVI) dropped to $298 million, down about $100 million from the previous month. Similarly, in September, Iran imported $128 million of Chinese-made cars and other vehicles (HS Chapter 87), the lowest level since March.
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China-Iran Trade Report (August 2022)
China’s Trade Surplus Grows
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for August 2022 show a slight rebound in Chinese imports from Iran after the significant drop experienced in July. The rebound was driven by non-oil imports, as the declared value of the Iranian crude that reached China hovered close to zero. ___STEADY_PAYWALL___
In August, Chinese imports from Iran settled just under the $500 million threshold. The slight rebound of Chinese imports was driven by non-oil mineral products (HS Chapter 24), whose value reached $44 million. In August, after a significant decline in July, the value of imported organic chemicals (HS Chapter 29) set back at $116 million.
The total value of Chinese imports was negatively affected by a further fall in oil imports, which declined to $1.5 million. August data are consistent with the significant drop in Chinese declared imports of Iranian crude in July. Oil import data from the past two months might suggest a trend similar to that seen between February and June 2022, in which China effectively zeroed the imports of Iranian crude for three consecutive months before declaring over $200 million for two straight months. At the same time, Chinese oil imports from the UAE and Malaysia remain high, indicating that a significant volume of Iranian oil is reaching China despite the fall in declared imports. Consequently, it remains difficult to gauge the real impact of Russian discounted oil marketed to Chinese teapot refineries on the volume of Iranian crude China imports via third countries.
Chinese exports to Iran remained stable, remaining slightly over the $1 billion threshold. On a month-to-month basis, the value of exported organic chemicals (HS chapter 29) declined by 25%. The exports of electric machinery (HS chapter 85) totalled $169 million – the highest value since the beginning of the year. Similarly, in August, Iran imported $232 million worth of cars and other vehicles from China, continuing the growth trend that began in March 2022. Overall, the high value of Chinese exports continues to move the China-Iran trade balance in Beijing’s favour.
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China-Iran Trade Report (June and July 2022)
Chinese Exports to Iran Surge
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for June and July 2022 show Chinese imports dropping significantly in July after consistent growth in the previous three months. Declared oil and non-oil imports from Iran suffered a sensible decline, with the declared value of Iranian crude that reached China in July at the lowest since April 2022. ___STEADY_PAYWALL___
In June, Chinese imports from Iran reached $888 million, the highest monthly value recorded in the past two years. This total includes $222 million of declared oil imports—again one of the highest levels recorded in the last 24 months.
Chinese imports from Iran in July dropped significantly to $390 million, with plastic and rubber (HS Chapter 7) and copper (HS Section 74) imports declining substantially month-on-month. Although there was also a significant decline in declared oil imports from Iran, which fell to $6.5 million, Chinese crude imports from the UAE and Malaysian remained at or near all time highs. The significant level of oil imports from the UAE and Malaysia suggests that despite the fall in declared imports, a significant volume of Iranian oil is still reaching China. This may indicate resilience in Chinese demand for Iranian oil vis-à-vis the growing volume of cheap, non-sanctioned Russian oil that has been marketed to Chinese teapot refineries since the beginning of the Russia-Ukraine War.
Chinese exports to Iran grew steadily in June and July, surpassing the $1 billion level. In July, the value of chemical products (HS Section 6) that Iran imported from China totalled $81 million, and base metals (HS Chapter 81) surpassed $100 million. Notably, Iranian imports of Chinese machinery (HS Chapter 84) totalled $243 million, marking a new high point in the year. Due to the highest value of exports and the drop in imports, the China-Iran trade balance moved significantly in China’s favour.
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China-Iran Trade Report (April and May 2022)
China is Still Buying Iranian Oil
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for May 2022 shows no major change in Chinese imports of Iranian oil, despite reports that discounted Russian oil may be squeezing Iran’s market share.___STEADY_PAYWALL___
Chinese exports to Iran rose from $611 million in April to $744 million in May. Rising inflation expectations spurred Iranian consumers to buy more goods in April and May, leading to a bump in new orders and higher output among Iranian manufacturers. Iran imported $175 million worth of Chinese machinery (HS Chapter 84), the highest total since January.
Chinese imports from Iran fell in April to $556 million as the country continued to undergo COVID-19 lockdowns. By May, imports rebounded to $703 million. But this total included an unusual $200 million declared purchase of Iranian crude oil (HS Chapter 27) that was likely destined for China’s strategic petroleum reserve. Chinese oil imports from Malaysia declined in May, but purchases from the UAE surged, suggesting that China is continuing to import significant volumes of Iranian oil even as more Russian crude is marketed towards Chinese refiners. But Russian oil should begin to displace Iranian oil in the coming months.
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China-Iran Trade Report (March 2022)
China Runs Trade Deficit With Iran
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for March 2022 shows China running a trade deficit with Iran for the first time in 12 months, due to a jump in non-oil imports.___STEADY_PAYWALL___
Chinese exports to Iran rose from $483 million in February to $595 million in March as Iranian firms put in new orders in anticipation of the end of the new years holidays. Iranian purchases of machinery (HS Chapter 84) rose from $106 million in February to $159 million in March.
Chinese imports from Iran showed an event bigger rebound, rising from $509 million in February to $722 million in March—this was the reason for China’s trade deficit. The rise in imports did not include a jump in declared imports of Iranian oil, although data for oil imports from UAE and Malaysia suggest that intermediated purchases of Iranian oil may have increased. Non-oil imports showed strong growth, with large jumps in Chinese imports of plastics (HS Chapter 39) and iron and steel (HS Chapter 72).
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China-Iran Trade Report (January and February 2022)
Seasonal Drop in Trade
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for the first two months of the year shows a drop in bilateral trade from the high point reached last December. While January totals remained close to December totals, bilateral trade dropped significantly in February. This seasonal drop in trade is associated with the Chinese New Year holidays which start on February 1.___STEADY_PAYWALL___
Chinese exports to Iran fell a from $847 million in January to $483 million in February—a 43 percent drop. Iranian purchases of Chinese goods were lower across different goods categories, but total purchases of machinery (HS Chapter 84), electrical equipment (HS Chapter 85), and vehicles and transportation equipment (HS Chapter 87), were $160 million lower in February than in the previous month, suggesting weak demand among Iranian industrial firms.
Chinese imports also declined by a significant percentage, 27 percent, totalling $509 million in February compared to $696 million in January. Part of the decline in imports can be attributed to a fall in declared imports of crude oil (HS Chapter 27). Total imports in this category fell from $136 million to just $5.8 million. Non-oil imports also fell, but by a far less significant 10 percent, remaining just above $500 million.
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China-Iran Trade Report (December 2021)
A Well-Timed Report
New data released by the General Administration of Customs of the People’s Republic of China (GACC) for December reveals the highest monthly level of trade with Iran in over two years. Total trade was valued at $1.65 billion. Notably, China declared direct imports of Iranian oil for the first time since December 2020, adding $148 million to the import total. But the rise in bilateral trade was also driven by strong non-oil imports, as well as by exports to Iran.___STEADY_PAYWALL___
Chinese exports to Iran fell 10 percent from their November peak to $891 million, marking the second highest total this year. Exports of machinery (HS Chapter 84) totalled $221 million, down 12 percent from November. Exports of vehicles and transportation equipment (HS Chapter 87) were down 15 percent from the previous month and totalled $131 million.
Chinese imports from Iran reached $760 million in December, a 54 percent increase on November’s total and the highest level in registered this year. The sharp rise in imports was partially due to the declared oil purchases, but also reflected an increase in Chinese purchases of organic chemicals (HS Chapter 29) and continued demand for plastics (HS chapter 39). When excluding the $148 million in oil imports (HS chapter 27), total imports rose to $611 million, the highest level in 24 months.
The release of the trade data comes just days after Iranian foreign minister Hossein Amir-Abdollahian completed a visit to Beijing. During the trip, Amir-Abdollahian and his Chinese counterpart, Wang Yi, announced that the 25-year Comprehensive Strategic Partnership agreement signed between China and Iran was proceeding into its “implementation” phase. While full implementation of deeper trade and investment links will depend on the lifting of US secondary sanctions, the recent uptick in bilateral trade suggests that China is committing to economic diplomacy with Iran, perhaps in anticipation of the restoration of the Iran nuclear deal.
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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.
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China-Iran Trade Report (December 2020)
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A Year That Could Have Been Worse
New data released by the General Administration of Customs of the People’s Republic of China (GACC) shows a relatively strong end to 2020 for China-Iran trade. Exports rose to USD 657 million from USD 609 million in the previous month. Imports bounced back, rising from USD 498 million to USD 733 million in December, meaning that China ran a trade deficit with Iran for just the second month in 2020, with China’s imports exceeding its exports by USD 78 million. Iran will be encouraged by decreasing trend in China’s trade surplus, which had been spurred in part by the supply-chain shocks related to COVID-19 and the volatility in the Iranian currency in the first nine-months of the year.
China’s declared oil imports were USD 180 million, the second highest monthly total in 2020. Add to this a considerably increase in declared imports from Malaysia and it is clear that Iran is exporting more oil to China, a fact that suggests the actual trade deficit China is running is greater than what the customs data suggests. It is possible that the increase in oil purchases, both directly from Iran and via Malaysia, is a reaction to the election of Joe Biden.
Overall, China-Iran trade ends 2020 with a stable outlook. The unexpected shock of the pandemic has passed and it appears that the impact of secondary sanctions is no greater than in 2019. Bilateral trade should be expected to return to 2019 levels in the coming months, so long as Iran’s economic recovery continues.
