Reuters reported that energy over metals, raw over refined, sums up the likely theme for China's commodity demand next year.
Commodity markets had become accustomed to China as a voracious consumer of resources, but 2012 showed that growth rates can slow, a trend likely to continue next year, but it won't be evenly spread.
The broad macro economic situation as the new year approaches should provide guidance as to where the likely winners lie for 2013.
Recent economic data said that China is regaining growth momentum and this is being led by infrastructure spending and consumer demand, and less so by the traditional powerhouse of exports of manufactured products. This isn't really much of a surprise as the Chinese authorities have been clear they want a more consumer led economy over the longer term.
And over the shorter term, infrastructure spending is the quickest way for large state owned enterprises and governments to quickly boost activity after the economy slowed a little more than anticipated in the middle of 2012.
Consumer spending in China tends to mean more vehicles as personal transport is still an aspiration for the ever growing middle class, with car sales rising 6.9% in the year to end October. This alone will boost China's fuel use, but it's not refined products that are the likely big winner in 2013, it will be crude demand.
China has been commissioning new refinery units at a rapid pace, with more than 1 million barrels per day expected to be added in 2012, and a further 600,000 barrels per day planned for next year. China's refinery throughput hit a record 10.13 million barrels per day in November, but it's unlikely that actual fuel consumption is quite as high.
According to International Energy Agency forecasts, the first is still positive for crude imports, as actual demand will be close to 9.8 million barrel per day in 2013.
Given domestic crude production of about 4 million barrels per day, this means monthly crude imports will have to average at least 5.8 million barrel per day, about 400,000 barrel per day more than the average for the first 11 months of 2012. This could be further boosted by small refiners obtaining licenses to directly import crude, rather than using fuel oil as a feedstock.
Iron ore was in some ways the surprise performer of 2012, as Chinese imports of the steel making ingredient were resilient despite the slowdown in economic activity that happened in the middle of the year. But iron ore imports are up more than 8% in the year to November, beating a Reuters consensus forecast made at the end of 2011 for a 6% gain in 2012.
Given global iron ore capacity may expand only moderately in 2013 as the big projects are likely to come on line in subsequent years and Indian exports are likely to fall further, there is every chance that iron ore will remain well supported.
Meanwhile, this is despite the likelihood of global steel capacity remaining strongly in surplus, meaning the steelmakers are likely to suffer from weak margins, even if demand does pick up with stronger conditions in China and perhaps even in Europe.
