Global oil demand growth set to slow in 2016 – IEA
Global oil demand growth is set to slow to 1.2M b/d in 2016, writes the International Energy Agency (IEA) in their latest monthly Oil Market Report. This is 150K b/d lower than the prior month’s forecast and down from a five-year high of 1.8M b/d in 2015. Recent downgrades by international organisations to the global macroeconomic outlook and expectations that crude oil prices will not see repeats of the heavy losses of 2015 were noted as reasons for the revision. Meanwhile, the IEA estimates that global oil supply held steady around 96.6M b/d in September, with lower non-OPEC product offset by an increase in OPEC crude output. OECD commercial oil inventories grew by another 28.8M bbls in August (double the average five-year average build for the month) to 2.94Bn bbls.
September Chinese Trade Data
September saw Chinese iron ore imports reach a year-to-date high of 86.1 Mt, up 1.4 Mt year-on-year and just 0.7 Mt short of the all-time high in December last year, according to preliminary customs data. This took imports in the 3q15 to a record quarterly high of 246 Mt. Moreover, China’s steel exports recorded a monthly all-time high of 11.3 Mt in September, up 2.7 Mt year-on-year and almost 1.0 Mt above the previous peak in January.
Coal imports fell by 3.4 Mt year-on-year to 17.8 Mt, continuing the trend which has seen imports fall annually for 15 months in succession. As a result, the January-September is 67 Mt below the same period last year at 157 Mt.
Finally, soyabean imports into China last month were 7.3 Mt, up 2.2 Mt on the same month last year, which took imports in the first nine months of the year to 59.6 Mt, compared with 52.7 Mt in the corresponding period last year.
World Steel Association’s Short Range Outlook
According to the latest Short Range Outlook from the World Steel Association, Chinese apparent steel use (ASU) is forecast to contract by -3.5% this year and again by -2.0% in 2016. This contraction in Chinese demand has contributed to a world ASU growth forecast of -1.7% this year to 1,513.4 Mt, with growth of 0.7% in 2016.
Azeri oil loadings set to fall m-o-m
Azeri oil loadings in November are expected to fall to 665K b/d, down from 717K b/d in October, Reuters reports.
German Crude Steel Production
September saw crude steel production in Germany fall by almost 4% year-on-year, according to a report from the country’s steel association (Wirtschaftsvereinigung Stahl), However, total output in the 3q15 remained 3.5% higher than the same period last year.
JX trims October crude refining plan for domestic use but raises product exports
Japan’s largest refiner, JX Nippon Oil & Energy Corporation, cut its crude oil refining plan for domestic use in October by 4% from an initial plan to 937K b/d, Reuters reports, citing a statement from the company. This was due to high domestic stockpiles of middle distillates. However, the refiner raised its projections for October oil product exports by 15% to 152K b/d as refining margins improve.
Chinese Steel Stock Rise
After falling to an 8-month low in late September, steel inventories at major Chinese cities, monitored by U-metal, climbed by 0.5 Mt to the current level of 10.8 Mt. Stocks are however, down by 5.2 Mt from their year-to-date high of 16.0 Mt in early March and by 1.3 Mt year-on-year.
Chinese Iron Ore Port Stockpiles
Chinese iron ore stockpiles fell by 4.4 Mt from two weeks ago to a 6-week low of 70.5 Mt in the week ending 9 October, according to data on 18 portside locations from U-metal. Current stockpiles are down by 29.9 Mt from the same point last year.
US coal Exports
August saw coal exports (excluding cargoes to Canada) from the US climb to a 3-month high of 5.3 Mt, up 1.2 Mt on July, according to data from the National Mining Association. However, August’s figure remains 1.2 Mt below the year-ago level.
Total coal exports in January to August of 44.9 Mt were 12.3 Mt below the corresponding period of last year. Coking coal exports plunged by 8.7 Mt year-on-year in the first eight months of the year to 27.7 Mt, while steam coal shipments declined by 3.6 Mt in the same period last year, to 17.1 Mt.
Chile’s Aconcagua refinery set to undergo maintenance
Chile’s 104K b/d Aconcagua refinery is expected to commence 44 days of refinery maintenance from Friday, Reuters reports, citing a statement from operator ENAP. The facility is one of two major refineries in Chile, with the Bio Bio refinery slightly larger at 116K b/d.
Turkish Steel Exports Decline
According to data from the Turkish Steel Exporters Association (CIB), cited by Steel First, the country’s steel exports fell by 8.1% year-on-year to 12.2 Mt in January to September. Some 4.3 Mt of steel were shipped to the Middle East, followed by the EU with 2.1 Mt, North America (1.9 Mt) and North Africa (1.5 Mt).
German Industrial Production
Industrial production in Germany suffered a significant decline in August, down by 1.2% from July, according to official data reported by Reuters. This marked the biggest monthly decline for a year. However, the country’s industrial output still rose by 2.3% on an annual basis.
Colombian Coal Exports
Colombian coal exports rose for the second consecutive month in August, up by a marginal 0.12 Mt from July to 6.42 Mt, according to data from IHS. However, August’s figure remains 0.56 Mt lower than the year-ago level. Total exports in January to August of 52.4 Mt were close to 6 Mt above the corresponding period of last year. Exports to Europe rose by 5.6 Mt year-on-year in the first eight months of the year to 37.4 Mt, while those to the Americas edged higher by 0.4 Mt in the same period last year, to 15.1 Mt.
India’s crude imports from Iran rise 17% m-o-m
India’s crude oil imports from Iran in September increased by 17% m-o-m but down 3.4% y-o-y to 233K b/d, Reuters reports citing tanker tracking data. This included a 2M bbl purchase by Indian Oil Corporation (the first since May) which is expected to be discharged at its recently commissioned 300K b/d Paradip refinery.
Australian Trade Data
Australian iron ore exports rose to 70.8 Mt (wet basis) in August, from 67.2 Mt in July, very close to June’s all-time high of 70.9 Mt, according to Australian Bureau of Statistics data. Imports for the period January-August were up by 37.8 Mt on the same period in 2014 at 526.0 Mt.
Australia’s coal exports climbed to a year-to-date high in August at 35.4 Mt, up 1.3 Mt year-on-year. Coking coal exports increased by 0.8 Mt year-on-year to 16.7 Mt, while shipments of steam coal and anthracite combined rose by 0.5 Mt to 18.6 Mt.
Colombia imports crude for first time since 2013
Colombia has followed fellow Latin American oil producers, Venezuela, Ecuador and Argentina, in importing light crude oil grades, Bloomberg reports. Colombia’s state-oil firm Eco-Petrol reportedly purchased September loading crude grades from Nigeria and Russia for its newly upgraded Cartagena refinery, which upon arrival will be the country’s first crude imports since January 2013.
Shell starts third phase of Nigeria’s Bonga oil field
Nigeria’s offshore oil production capacity has expanded after Shell commenced phase three of the Bonga oil field, Bloomberg reports. Peak production is expected to reach 50K b/d, with the floating production and storage facility at the site capable of handling more than 200K b/d.
China Daily Steel Production
Daily crude steel output at China Iron and Steel Association (CISA) member mills rose to 1.69 Mt, from 1.65 Mt/day, in the period 11-20 September, according to data from the industry association reported by U-metal. Nevertheless, this was still below the year-to-date average of 1.71 Mt/day and is down from 1.79 in the same ten days of 2014.
Japanese Coal Imports Breakdown
Japanese steam coal imports (incl. anthracite) fell to 10.5 Mt in August, down by 0.2 Mt year-on-year, according to the Tex Report. However, imports for January-August were still up by 2.7 Mt on the same period in 2014 at 78.8 Mt, as a strong increase in shipments from Australia negated a drop in cargoes from Indonesia. The situation was the reverse for coking coal, where imports in the first seven months of the year were down by 2.1 Mt annually at 47.5 Mt, although August imports were up by 0.5 Mt at 6.0 Mt.
Russian oil output hits post-Soviet record in September
Russian’s oil output in September rose by 1% y-o-y to a post-Soviet record of 10.74M b/d, Bloomberg reports. Soviet-era production peaked at 11.48M b/d in 1987.
Brazilian Trade Data
Brazilian iron ore exports rose to their highest level of 2015 in September at 35.6 Mt, up 2.5 Mt year-on-year according to official data. Shipments in January-September of 264.5 Mt were up 15.2 Mt on the same period in 2014.
Corn exports from Brazil climbed to a 22-month high of 3.5 Mt in September, up 0.8 Mt year-on-year, according to official data. Meanwhile, soya shipments continued their seasonal decline, dropping to 4.8 Mt, but still up by 0.9 Mt on September 2014.
Port Hedland Iron Ore Exports
Iron ore exports from Australia’s Port Hedland climbed to an all-time high of 39.4 Mt in September, up 3.1 Mt year-on-year, according to port authority data. Shipments to China were up 4.0 Mt at 33.8 Mt, while there were falls in cargoes to Japan and South Korea. Exports to all destinations in January-September were up by 30.0 Mt on the same period in 2014 at 334.7 Mt.
China Manufacturing and Steel Sector PMI
China’s official manufacturing purchasing managers’ index (PMI) rose slightly to 49.8 in September, up from 49.7 in August, according to National Bureau of Statistics data. However, this meant a second successive month below the 50 benchmark that separates expansion from contraction.
The country’s steel sector PMI fell to 43.7 in September, from 44.7 in August, the seventeenth successive month of contraction in the industry, according to data from the China Federation of Logistics and Purchasing reported by SteelFirst.
Newcastle Coal Shipments
Coal exports from the Kooragang and Carrington terminals at the Port of Newcastle fell to a five month low of 8.9 Mt in September, down 1.0 Mt year-on-year, according to port authority data. Shipments to Japan (-0.3 Mt to 4.8 Mt) and China (-1.0 Mt to 0.6 Mt) fell in September, while exports to South Korea (+0.6 Mt to 1.3 Mt) increased.
Iraq’s crude exports slip m-o-m
Iraqi crude oil exports in September edged lower to 3.05M b/d, down from 3.08M b/d in August, data from the country’s Ministry of Oil shows. The majority of the exports came from the country’s southern port of Basrah, with volumes averaging 3.03M b/d, up marginally m-o-m. In Northern Iraq, crude exports from Kirkuk were only 22K b/d with the Kurdistan regional Government having cut its allocation to Iraq’s state-oil firm SOMO in a continuing dispute over export rights and budget payments. Iraq’s southern oil exports are expected to only rise to a around 3.25M b/d in 2016, according to the head of state-owned South Oil Company, as the country struggles to boost production in a lower price environment, Reuters reports.