PERTH (miningweekly.com) – Despite concerns that the contrary was true, China’s demand for raw material remains significant, joint research from the Bureau of Resources and Energy Economics (BREE) and Westpac indicated.

The joint China Resources Quarterly (CRQ) indicated that the Chinese economy grew at a rate close to, but slightly below, its potential in the first half of 2014, supported by easier fiscal policy, firmer exports and the conclusion of the negative phase of the short run inventory cycle.

As a result, China’s resources and energy use continued to be strong across most commodities.

Against a backdrop of rising concern about its economic growth and construction, China’s steel production was a record 209-million tonnes in the second quarter of the year, up 4.7% on the previous corresponding period, contributing to record iron-ore imports of 235-million tonnes during the quarter.

Australia was a major contributor to this growth, with China sourcing 138-million tonnes of iron-ore from the Pilbara during the period under review, up 35% on the previous corresponding period.

The value of the iron-ore imports increased by 19% on the previous corresponding period, to A$14.6-billion.

Australia also exported some 11.5-million tonnes of metallurgical coal during the quarter to June, up 18% on the previous corresponding year, and valued at around A$12.77-billion.

Thermal coal imports from Australia were also up 13.5% compared with the June quarter of 2013, to 12.8-million tonnes, worth an estimated A$869-million, while oil imports decreased by 10.8%, to 712 000 t, and gas imports decreased by 7%, to 904 600 t.

Gold imports from Australia also declined by 10% to 40 t, during the quarter ended June, while nickel imports declined by 41% to 112 000 t, owing to reduced production from Australia.

The CRQ report pointed out that while commodity prices continued to exhibit softness in the second quarter 2014, contrary to popular belief, lower prices had been driven largely by increased supply rather than any material change in demand.

“Competition to supply China’s demand for mineral and energy commodities is growing with new low-cost mineral regions emerging around the world following the wave of international investment of the past five years,” the CRQ report said.

“For traditional mineral and energy commodity producers, such as those in Australia, the resulting market pressures have forced companies to re-evaluate their operations with a renewed focus on cutting costs and improving productivity to remain profitable in an increasingly competitive market.”