Thread by @jordicalaveraa

Kitty Special: This month in China, July 2022 🇨🇳🧵

1 July: CCX Tanker Freight from ME to China and Dirty Tanker TD3C are both climbing. There is more oil out of the Gulf and more demand from China. If China opens up refining capacity meaningfully, then crude will move higher again.

h/t @kittysquiddy, @JimmyWar77

4 July: China crude demand is ramping up quickly. It will hit a delta of +1 mb/d soon.

h/t @kittysquiddy

5 July: China services PMI moves from 41.4 to 54.5 without passing by the 49.6 forecast box. This is typically volatile and prone to revisions, but now you have services confirming the expansionary industrial reading.

h/t @kittysquiddy

5 July: Many new cases of C-19 have been detected in Shanghai. A KTV host is thought to be patient-zero. They performed at 6 venues in 5 districts 🎤. Panic at transport hubs.
h/t @nicjamtobin, @91Mafio, @jin_trade

7 July: The IIF capital flows tracker showed that China was the only Asia jurisdiction getting inflows yesterday. However, HY and construction will take some time to unwind.

h/t @kittysquiddy

7 July: The Ministry of Finance considers allowing Local Governments to issue $220b in bonds during H2 for infrastructure spending.

h/t @kittysquiddy

7 July: Mortgage lending has slowed sharply in 2022.

h/t @kittysquiddy

8 July: Aerial supervision of Chinese steel mills shows o/p queue (finished steel) and i/p queue (scrap steel) were at a standstill. Industrial facilities were forced to run at max capacity post-Shanghai lockdown as an act of window-dressing despite no demand.

h/t @kittysquiddy

8 July: The majority of the EAF steel mills have scrap input and are easy to shut down. But large steel mills (BF/BOF) with iron ore as input will not shut down easily. They have frontloaded maintenance.

h/t @JJ_fractal

8 July: The correlation between industrial production and minor bulk demand debunks any recession narrative. This is despite China's lockdowns and with more infrastructure spending on the way.

h/t @kittysquiddy

9 July: Recently leaked data suggests:
-China's births began to decline in 1991.
-The population is now less than 1.28 billion, not the official 1.41 billion.
-The population began to shrink in 2018, not 2031 as officially predicted.

h/t @fuxianyi

11 July: China's June vehicle sales were +24%. Q2 was poor given April/May data, but the inflection is what matters.

h/t @kittysquiddy

11 July: Stories of bank runs are starting to cluster despite being systematically denied. New home sales in China go below 600ksm, increasing strain on developers with long tendrils into the banking system.

h/t @kittysquiddy, @CornholioCap

12 July: Commodity gluts are starting to appear.

h/t @kittysquiddy

13 July: Homebuyers in at least 22 Chinese cities are refusing to pay their mortgages because of project delays and a drop in property prices.

h/t @SofiaHCBBG

13 July: The China Iron and Steel Association convened on Friday for a Q2 industry review. Its findings were: Steel demand is low, domestically and globally. Steelmakers are losing money.

h/t @triviumchina

13 July: China crude imports dropped by 2mbpd in June after March-May stock builds according to Energy Aspects.

h/t @BurggrabenH

14 July: China exported 3.21 million mt of oil products in June. A slump of 50.2% from June 2021, accelerating from a drop of 39.5% in May. It's likely they want their own economy to profit from the discount on Russian/Ural oil.

h/t @kittysquiddy, @Jeremi_C_S

14 July: Iron ore spot prices and the correlation between China PPI & the Baltic Capesize index do not indicate that there is an infrastructure spending splurge underway.

h/t @kittysquiddy, @BurggrabenH

15 July: In early July, China destroyed an object believed to be shaped like a Japan Self-Defense Force E-767, likely with a ballistic missile.

h/t @JakobPredin

19 July: China and other non-OECD members are in crude and products hoarding mood. China has large excess reserves and they are re-balancing from holding USTs to holding physical barrels.

h/t @kittysquiddy

20 July: Russian gas supplies to China via the Power of Siberia pipeline reached an all-time daily record on July 17.

h/t @kittysquiddy

21 July: A recent protest in Shenzen involving unpaid construction workers was efficiently disbanded by special police.

h/t @kittysquiddy

21 July: Construction costs in China are coming down. There are anecdotes of projects completing well below budget.

h/t @kittysquiddy

@kittysquiddy 23 July: China moves to quash a revolt among homeowners who have threatened to renege on mortgages on unfinished properties, censoring social-media posts and telling banks to keep money flowing to developers.

h/t @iammarkcarnegie

26 July: June 2022 exports of urea, diammonium phosphate and monoammonium phosphate are down 61%, 78% and 51% respectively vs June 2021.

h/t @kittysquiddy

Jul 29: The divergence between Queensland Hard Coking and Newcastle Thermal captures the China construction unwind and the EU energy crisis.

h/t @kittysquiddy

29 July: Tensions in the South China Sea as PLA Day celebrations approach and rumours of a Pelosi trip to Taiwan circulate. It seems that the CCP has chosen not to suppress the rhetoric and it is playing out more publicly than previous tensions.

h/t @yoursnare, @stevennsy

結束

Encore! h/t @iammarkcarnegie

https://twitter.com/ABartonMacro/status/1553643457226350592?t=pKR6b9CkevaeZvJoNVxhag&s=19