By Eadie Chen and David Stanway

BEIJING, Nov 23 (Reuters) - China's oil demand edged down in October but appetite for base metals slumped as the country's economic recovery proved more supportive of some sectors than others, customs data showed on Monday.
Compared to October last year, both oil and metals demand seemed robust, since production has soared and imports are way above last year's levels, implying China has a strong appetite for commodities across the board. Apparent oil demand is up 10.3 percent, while demand for refined copper has jumped 28.6 percent.
China's economy has picked up over the course of the year, with third-quarter GDP growth rising to an annual 8.9 percent from 7.9 percent in the second quarter and 6.1 percent in the first, virtually assuring China of reaching its 8 percent full-year target.
Last October saw the first real impact of the global economic crisis on China, so comparisons with 2008 are flattering, while comparisons with September 2009 are more telling.
They show demand for oil inching down 2.3 percent in October but demand for copper plunging 19.9 percent and demand for nickel -- used in stainless steel -- plummeting 37.1 percent.
The slowdown, which also hit aluminium and zinc, reflects a big fall in China's imports during October, a sign of oversupply in China that many metals markets experts had already expected to see for several months.
"Easing Chinese imports will be an obstacle for prices in the short term. The market is running ahead of itself and there is reason to expect a pull back," said Yingxi Yu analyst at Barclays Capital.
But the slackening of China's apparent demand is not entirely bad news for metals bulls: it also reflects a pick-up in China's exports, which have slumbered all year because of dormant economic activity elsewhere.

A global revival of confidence in steel production, for example, helped almost double China's nickel exports in October, with more than half going to South Korea. It may have also helped moderate China's runaway imports of coking coal, which fell back to 2.2 million tonnes after averaging 4.4 million in the previous four months, 8 times the average in 2007-2008.
Exports of zinc, also used in steel, rose almost 2-½ times, while refined copper exports jumped 73 percent to 18,508 tonnes, more than 10 percent of the imported volume of 169,374 tonnes.
But many in the metals markets are nervous about the size of China's stockpiles, since the country has taken delivery of record volumes of imported and domestically produced metal this year, and nobody thinks it has all been used up.
That leaves a question mark hanging over demand in the world's top consumer of base metals. A second, more threatening question is whether some of these stocks might come back onto the market, further eroding demand for imports.
But that uncertainty is not shared by the oil market: data obtained by Reuters shows that fuel stocks held by the top two oil firms, Sinopec and PetroChina, fell by 5 percent in October, so real demand was stronger than suggested by trade figures and domestic production alone.
China's diesel and gasoline prices are higher than ever before, giving refiners an incentive to produce but eroding discretionary demand from China's growing army of drivers.
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Although net exports of both fuel oil and diesel increased during the month, exports of gasoline -- needed by buyers of China's car production, which has soared this year -- fell.
Analysts said the low bases of late 2008 and early 2009 as well as China's consolidating economic recovery will help push oil demand in the world's second-largest oil-consuming nation into apparently rapid growth in the coming months.
"Looking ahead, 2010 could be the mirror image of 2009. The first half demand growth is expected to be strong, continue to grow at around the double digit level, while the growth in the second half should be slower," Paul Ting, an independent oil analyst, said in a recent note.
"There are two obvious offsetting factors: The stimulus programme may slow down in 2010, but China's underlying GDP growth may strengthen," he wrote.

(Editing by Clarence Fernandez)

((tom.miles@thomsonreuters.com; +86 10 6627 1200; Reuters Messaging: tom.miles.reuters.com@reuters.net)) Keywords: CHINA COMMODITIES/TRADE (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

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