Russia’s crude exports in June set to fall m-o-m but remain strong y-o-y
Russia’s seaborne crude oil exports in June are expected to decline by 22K b/d m-o-m but rise by 203K b/d y-o-y to 2.8M b/d, Energy Intelligence reports. Black Sea exports are projected to experience the strongest growth, rising by 123K b/d m-o-m and 147K b/d y-o-y to 660K b/d. In contrast, shipments from Kozmino are set to drop by 100K b/d from May and by 18K b/d y-o-y to 568K b/d. Meanwhile, Baltic volumes are scheduled to slip by 45K b/d from May but increase by 74K b/d y-o-y to 1.6M b/d.
Union votes to extend strike at Le Havre until Monday
French CGT union members at the CIM (an oil storage and supply services company which handles around 40% of France’s crude oil imports) have voted to extend a strike at France’s second largest oil port, Le Havre, until Monday, Reuters reports. France has been affected by labour strikes in its oil sector across this week, with a number of refineries closed and oil tankers queues building at its ports, including Le Havre and Fos-Lavera (the country’s second largest and largest oil ports respectively).
Japanese Steel Exports Fall
Japanese steel exports fell to a three-month low of 3.2 Mt in April, down 0.4 Mt year-on-year, as shipments to Asia and South America declined according to the Japan Iron and Steel Federation. Exports in the first four months of the year were down by 0.6 Mt at 13.6 Mt.
IGC Lowers South American Soyabean Export Forecast
The International Grains Council (IGC) has cut its forecast for soyabean exports from Brazil and Argentina in 2016/17 (Oct-Sep) to a combined 66.9 Mt in expectation of lower export availability. In contrast, US exports are forecast at a record 51.3 Mt as higher import demand from China, now expected to reach 87.0 Mt, drives growth in global trade.
Meanwhile, robust demand from North Africa contributed to the forecast for Russian wheat exports in 2016/17 (Jul-Jun) being lifted to a record 24.5 Mt. The EU export forecast has been raised to 32.6 Mt, the second-highest on record.
Chinese Iron Ore Output
China’s domestic iron ore output rose by 2.3% year-on-year in April to 102.6 Mt, according to National Bureau of Statistics data, reported by Reuters. As production in the first four months of the year was down by 2.5% on the same period in 2014, this may indicate a restart of mining operations encouraged by recent high prices. NBS data makes no allowances for variations in ore quality.
South Korean Iron Ore Imports
South Korean iron ore imports from Brazil fell sharply in the 1q16, dropping by 1.1 Mt year-on-year to 2.5 Mt, according to the Tex Report. There was also a 0.4 Mt decline in shipments from Australia to 12.9 Mt, however annual increases in imports from Canada (+0.5 Mt to 0.8 Mt) and Chile (+0.4 Mt to 0.4 Mt) meant overall imports only fell by 0.3 Mt to 17.9 Mt.
Brent crude oil price moves above $50/bbl
The price of Brent crude oil has risen above $50/bbl for the first time in almost seven-months, Reuters reports. Prices have been recently supported by outages in global crude supplies (particularly in Canada and Nigeria), while a decline in US crude stocks yesterday added further upward pressure.
Niger Delta attack shuts down Escravos crude facilities
An attack on Chevron’s Escravos terminal has led to the shutdown of operations at the facility, Reuters reports. Escravos crude exports for 1H16 are projected to average 167K b/d, although production of the crude was already down by more than 40K b/d after another attack on a Chevron offshore facility in early May.
US Steel Price Surges
The US domestic price for hot rolled band (HRB) rose by $59/t in the two weeks to 25 May to the highest level since the end of December 2014 at $684/t, according to the latest SteelBenchmarker from World Steel Dynamics. In contrast, a $28/t fall in the Chinese HRB price over the same period to $333/t, helped pull the world export price for HRB $25/t lower to $427/t. This resulted in the spread between the US and world price was the widest in over fifteen years. Meanwhile, the Western European price for HRB increased $12/t to $487/t, the highest level in over 16 months.
US crude stocks decline to lowest since early April
US crude oil inventories fell by 4.2M bbls w-o-w to a six-week low of 537M bbls in the week ending 20 May, according to the US Energy Information Administration. US crude imports dropped by 362K b/d from the prior week to 7.3M b/d. US crude refinery throughputs were down by 92K b/d w-o-w to 16.3M b/d.
Chinese Bauxite and Nickel Ore Imports
China imported 4.0 Mt of bauxite from Atlantic suppliers in the first four months of the year, compared with just 0.7 Mt in the same period last year, according to customs data. Bauxite imports from all sources increased by 3.3 Mt annually in January-April to 18.0 Mt. This increase in shipments from the Atlantic has coincided with fewer cargoes from Malaysia as a result of the country’s mining ban earlier this year.
Meanwhile, China’s nickel ore imports fell by 1.7 Mt year-on-year in April to 1.4 Mt, which coincided with a jump in imports of both finished nickel and ferronickel, with Indonesia a prominent supplier of the latter.
US Steel Imports Continue Slump
US steel imports fell on an annual basis for the thirteenth month in succession in April, dropping by 1.0 Mt to 2.2 Mt, according to US Census Bureau data. Imports in January-April were down by 4.8 Mt on the same period last year at 9.0 Mt, marking the weakest start to any year since 2011.
South Korea’s crude imports from Iran surge y-o-y
South Korea’s crude oil imports from Iran in April increased by 111K b/d y-o-y to 237K b/d, Reuters reports, citing data from state-run Korea National Oil Corp (KNOC). However, volumes were down by 27K b/d m-o-m.
April Chinese Iron Ore Imports by Source
Of the 83.9 Mt of iron ore China imported in April, 80.5% was sourced from Australia and Brazil, the lowest combined share since December 2014, according to Chinese customs data. Shipments from Australia fell 0.1 Mt year-on-year to 51.3 Mt, while imports from Brazil rose by 0.5 Mt to 16.3 Mt, still a six month low. Higher volumes from Mauritania meant total Chinese iron ore imports from West Africa climbed to a 16-month high of 1.6 Mt in April, up 0.2 Mt year-on-year. In contrast, imports from South Africa fell by 0.1 Mt to 3.6 Mt.
Meanwhile, China’s coking coal imports climbed to a nine-month high of 5.4 Mt in April, up 1.6 Mt year-on-year, according to customs data. Shipments from Australia jumped 75% on an annual basis to 3.0 Mt, while imports from Mongolia climbed 27% to 1.7 Mt. However, shipments of steam coal (incl. anthracite) fell 2.3 Mt, to 8.9 Mt, meaning coal imports were down an annual basis overall.
China’s crude imports from Russia rocket to record high
China’s crude oil imports from Russia in April increased by 76K b/d m-o-m and 404K b/d y-o-y to a record high of 1.2M b/d, data from China’s General Administration of Customs shows. China’s overall crude imports for the month rose by 250K b/d m-o-m and 560K b/d y-o-y to 8M b/d. Supplies from the Middle East were up by 303K b/d from the prior month but dropped by 368K b/d y-o-y to 3.9M b/d. Imports from West Africa jumped by 262K b/d m-o-m and 331K b/d y-o-y to 1.3M b/d, but from the Caribbean and Latin America they declined by 199K b/d m-o-m yet increased by 112K b/d y-o-y to 1.1M b/d.
Canadian Iron Ore Exports
Canada exported 8.9 Mt of iron ore in the 1q16 (excl. cargoes to the US), up 1.3 Mt year-on-year as shipments to China increased sharply, according to the Tex Report. Canadian exports to China more than doubled in the 1q16 to 2.0 Mt. However, Europe remained the primary market for Canadian ore with shipments up 0.3 Mt at 4.8 Mt.
World Steel Output
Global steel production for the 66 countries that report to the World Steel Association fell by 0.5% year-on-year in April to 134.9 Mt. This is the sixteenth month in succession production has fallen annually. April’s decline was primarily due to diminished output in the European Union where lower production in Germany (-1.5% to 3.6 Mt) and a collapse in French output (-26.5% to 1.0 Mt) saw production for the bloc as a whole decline by 5.2% to 13.5 Mt.
Chinese steel output rose by 0.5% year-on-year to 69.4 Mt in April, while increases in India (+3.9% to 7.8 Mt) and Japan (+1.2% to 8.5 Mt) countered a further fall in South Korea (-1.3% to 5.7 Mt), meaning steel output in Asia rose annually for a second successive month.
Meanwhile, US crude steel output increased on an annual basis for the third month in succession, rising by 2.5% to 6.6 Mt. In contrast, Russian production continued to decline, dropping by 0.4% to 5.9 Mt.
India’s crude imports hit record high, but oil product exports fall to 2016-low
India’s crude imports in April increased marginally m-o-m and by 490K b/d y-o-y to a record high of 4.39M b/d, according to the country’s Petroleum Planning and Analysis Cell. The country’s diesel imports also climbed to a 5-year high of 125K b/d, from typical levels of close to or at zero. Despite the rise in crude imports, India’s clean oil product exports (of diesel, petrol, naphtha and jet fuel) dropped to a year-to-date low of 1.23M b/d, down by 44K b/d m-o-m, highlighting the strength in domestic demand. These exports were, however, still significantly higher than April 2015 volumes of 807K b/d which were a multi-year low.
Brazilian Steel Output Falls Sharply
Brazil’s crude steel output plunged to the lowest level since June 2009 in April at 2.3 Mt, down 20.6% year-on-year, according to data from Aço Brasil, the country’s steel institute, reported by SteelFirst. Steel production in January-April was down by 14.5% on the same period in 2015 at 9.7 Mt.
Ecuador shuts crude pipeline and lowers Esmeraldas refinery throughputs following earthquakes
Ecuador’s heavy crude pipeline (OCP) has suspended operations as a precautionary measure after the country was hit by two earthquakes, Argus reports. The pipeline had recent throughputs of around 165K b/d. So far crude loadings have not been suspended as OCP has crude in storage at facilities at the Balao terminal. Meanwhile, the country’s 110K b/d Esmeraldas refinery is operating at 77% of capacity as its Crude 2 and FCC unites were also halted as precautionary measures.
Chinese House Prices Rise
Average new home prices in 70 major Chinese cities monitored by the National Bureau of Statistics rose by 6.2% year-on-year in April, the fastest rate for two years, Reuters reports. Price growth remained strongest in tier one cities, particularly Shanghai and Shenzhen, however second and third tier cities saw a pickup in April which contributed to 46 of the 70 cities seeing annual price gains, up from 40 in March.
Iran’s oil exports set to climb around 60% y-o-y
Iran’s oil exports in May are expected to rise to 2.1M b/d from 1.3M b/d in May 2015, Reuters reports. However, volumes are below April loadings of 2.3M b/d, which were the highest since January 2012.
US Industrial Production
US industrial production contracted by 1.1% year-on-year in April, with output in the mining sector falling sharply, the US Federal Reserve reports. This follows a reduction of 2.0% in March and is the eight month in succession output has shrunk.
Meanwhile, after three successive months of contraction Japanese industrial production expanded by a revised 0.2% in March, according to the country’s Ministry of Economy Trade and Industry.
Turkish Steel Output Rises
Turkey’s crude steel output rose to 2.9 Mt in April, up 5.3% year-on-year, as higher steel prices encouraged mills to increase production, according to data from the Turkish Steel Producers’ Association reported by SteelFirst. Steel output in the first four months of the year was up 2.8% on the same period in 2015 at 10.6 Mt.
US shale output forecast to hit 24-month low
US shale oil output in June is projected to fall by 112K b/d m-o-m and 570K b/d y-o-y to 4.8M b/d, the lowest since June 2014, according to the US Energy Information Administration.