Refinery maintenance reduced South Korean crude runs and product exports in April
South Korean crude runs averaged 2.23 mb/d in April, down by 316 kb/d from March and by 234 kb/d year-on-year, according to the latest data from Korea National Oil Corporation (KNOC). As a result, South Korean product exports declined by 99 kb/d mom, but were still 36 kb/d higher than a year earlier. Product imports averaged 970 kb/d, up by 61 kb/d mom and 236 kb/d yoy. South Korean crude imports fell by 58 kb/d mom and 137 kb/d yoy to 2.30 mb/d.
Limitations on Iron Ore Supply
In India the Central Empowered Committee (appointed by the Supreme Court) has ruled out the resumption of iron ore exports from the west coast state of Karnataka, according to local media reports. Last month the Supreme Court permitted some mines in the state with an estimated combined output capacity of 4.5 Mtpa to resume production. Prior to the initial export ban in 2010 Karnataka had exported 20 Mtpa of iron ore. Chinese imports of Indian iron ore totalled just 3.4 Mt in January-April this year.
Elsewhere, Reuters carries a report that Iran’s government is proposing an iron ore export tax of up to 40% based on the fob price. Chinese import data show shipments from Iran reached 7.9 Mt in the first four months of the year, up 1.8 Mt year-on-year and making Iran the fourth-largest overseas supplier of iron ore to China.
Russian Coal Exports in the 1q13
Russian coal shipments from terminals on the country’s Pacific coast rose 1.9 Mt year-on-year to 11.7 Mt in the 1q13, data quoted by Reuters indicate. By contrast combined Russian coal exports from facilities on the Baltic, Black and White Seas experienced comparatively modest growth of 0.4 Mt over the same period to 16.1 Mt.
April Chinese net diesel exports fall from March, continue strong year-on-year growth
Chinese net diesel exports averaged 72 kb/d in April, down by 23 kb/d from April, but up by 62 kb/d yoy, according to the latest customs data. Net gasoline exports averaged 132 kb/d, down by 6 kb/d from the 26-month high witnessed in March and up by 96 kb/d yoy. Net kerosene exports fell to a six-month low of 34 kb/d, down by 49 kb/d mom and by 44 kb/d yoy. Net imports of naphtha showed a large increase, rising by 47 kb/d mom and 62 kb/d yoy to a year-to-date high of 101 kb/d.
China’s iron ore imports by source
As well as demonstrating annual declines in iron ore into China from Brazil (-3.5 Mt to 51.0 Mt) and India (-14.6 Mt to a mere 3.4 Mt), a breakdown of April’s imports by source shows significant annual gains from Australia (+13.7 Mt to 122.1 Mt) and West Africa (+3.0 Mt to a combined 6.5 Mt). Sierra Leone contributed 3.0 Mt to the West African year-to-date total, up from 0.8 Mt in January-April 2012.
World crude steel production
Global steel production in April edged lower by 2% from March’s record to 132.1 Mt, but was still 1.2% higher than the year-ago level, according to World Steel Association. The April output brings global steel production in the first four months of the year to 521.3 Mt, 1.9% higher than the corresponding period in 2012.
Growth in Chinese output has been accompanied by decreasing steel production in other parts of the world. Annual declines in April were led by the US (-7.3% to 7.3 Mt), the EU-27 (-4.9% to 14.1 Mt) and the FSU (-6.9% to 8.9 Mt). By contrast, annual growth was recorded in China (+6.8% to 65.6 Mt), India (+3.5% to 6.6 Mt) and Japan (+1% to 9.2 Mt).
Turkish coal imports
Coal imports by Turkey declined by 6% year-on-year to 6.5 Mt in the 1q13, consisting of 5.3 Mt of steam coal and 1.1 Mt of coking coal, trade statistic shows. In the first three months of this year, Turkey imported 2.2 Mt of Russian steam coal, while imports from Colombia were down by 16% to 1.42 Mt. Coking coal imports from the country’s largest supplier, the US, were up 28% year-on-year to 0.74 Mt.
GSP review to remove duty-free status on EU crude imports from key suppliers
EU imports of crude oil from several key suppliers will be subject to duty from next year, Argus reports. The EU will reduce the number of countries from which imports are duty free under the generalised system of preference (GSP) in 2014. As a result, shipments from major suppliers Russia, Saudi Arabia, Libya, Kazakhstan will be liable to a 4.7% tariff. These countries accounted for 6.4 mb/d (54%) of the EU’s crude imports in 2012. Other smaller crude suppliers – including Venezuela, Kuwait and Brazil – will also no longer be included on the GSP list. Argus calculates that nearly $5/bbl will be added to the cost of crude imports from countries no longer eligible for GSP exemptions. Product imports will also be affected, making jet fuel imports from the Middle East Gulf more expensive, but favouring refiners from India, a country that remains on the GSP list.
South Korea confirms end of gasoline and diesel import tax break
Confirming earlier speculation, the South Korean Energy Ministry will end an import duty exemption for gasoline and diesel traded on the online Korea Exchange, Reuters reports. The tax break will be scrapped in July. The decision is expected to see the country’s refiners divert some of the diesel they currently export to the domestic market.
Indonesian coal exports
Indonesia exported 106.8 Mt of coal (including lignite) in the 1q13, data from Bank Indonesia show. While this total is slightly lower than the quarterly all-time high of 111.2 Mt set in the 4q12, it marks sizeable annual growth of 18.6 Mt.
Meanwhile, exports of bauxite in March reached 4.9 Mt, the strongest month since tighter export regulations were introduced by the government in April 2012.
NNPC: Nigerian refineries operating at higher rates
Nigeria’s three refineries, with a combined capacity of 445 kbd, are processing 290 kb/d according to state-oil company, NNPC, Argus reports. This is significantly higher than in recent years, with utilisation not rising above 40% between 2008 and 2012. NNPC say that the refineries are producing 65 kb/d of gasoline, 50 kb/d of diesel and 35 kb/d of kerosene. Low refinery output and rising domestic demand has forced Nigeria to rely on fuel imports, largely from Europe.
US industrial production
According to the Federal Reserve, industrial production in the US in April rose at an annual rate of 1.9%. This was the slowest rate of increase since October 2012 and followed 3.5% growth in March.
UK coal imports
UK coal imports in March rose by a modest 4% month-on-month to 3.6 Mt, but were down by 0.5% from the year ago, according to Customs Statistics. Total imports in the 1q13 reached 10.8 Mt, an increase of 6% on the corresponding period last year. 1q13 saw shipments from the UK's main supplier, Russia, edging down by 0.1 Mt to 4.1 Mt, with US exports to the UK climbing 1.5 Mt to 3.2 Mt and imports from Colombia down 0.3 Mt to 2.7 Mt.
US gasoline inventories rise amid weak demand and higher imports
The latest weekly data from the EIA show that US gasoline inventories rose by 2.6 MB last week to 217.7 MB, a level 6.6% higher than at the same point last year. Gasoline supplied, a proxy for demand, averaged 8.34 mb/d last week, taking the 4-week average to 8.49 mb/d, down by 3.1% yoy. Gasoline imports reached 781 kb/d last week and have averaged 713 kb/d over the last four weeks, up by 6.5% yoy. The four-week average of US gasoline production reached 8.85 mb/d last week, down by 0.5% yoy.
World steel price at year-to-date low
The world export price of hot rolled band declined to a year-to-date low of $553/t, down by $20/t over the last three weeks, according to the latest SteelBenchmarker published by World Steel Dynamics.
HRB prices have fallen in key regions: 1) the US, down by $13/t to $647/t, the lowest level since November 2011; 2) China, to a six-month low of $499/t; 3) and the EU, to a 5-month low of $617/t.
Chinese crude steel production in April remained very close to the record levels of March, according to government data quoted by Reuters. April output of 65.65 Mt was up 5.1 Mt year-on-year and took Jan-April production to 258.2 Mt (up 20 Mt YoY).
Chinese crude runs fall from March to April, but up from year earlier
Refinery maintenance saw Chinese crude runs fall by 291 kb/d mom to 9.36 mb/d in April, according to the latest data from the National Development and Reform Commission. Nonetheless, runs were 332 kb/d higher than during the same month in 2012.
IEA releases medium-term outlook
In its latest Medium-Term Oil Market Report, the IEA forecasts that global oil demand will rise by 6.9 mb/d between 2012-18 to reach 96.7 mb/d. After modest expansion in 2013, improved economic conditions are expected to accelerate the pace of oil demand growth in 2014-15, before increased efficiency and switching to other fuels moderates consumption growth in 2016-18. OECD demand is expected to decline by 1.5 mb/d to 44.4 mb/d, whilst non-OECD consumption is forecast to rise by 8.4 mb/d to 52.3 mb/d over the period. Global oil supply capacity is forecast to expand by 8.4 mb/d to 103 mb/d between 2012-18. Non-OPEC output is expected to rise by 6 mb/d to 59.3 mb/d by 2018, led by North American production increases. OPEC capacity is expected to reach 36.75 mb/d in 2018, up by 1.75 mb/d from 2012.
Goa’s iron ore production
Goa’s mines director has stated in an interview with Reuters that Goa’s iron ore production is ready to resume by December subject to Supreme Court approval. Mining operations at all 80 mines in the state were suspended in September last year due to a ban imposed by the government as a result of unlicensed mining activities. The official added, however, that the resumption of mining by November/December was a best case scenario.’ Goa’s mines have a capacity of 40 Mtpa, which were exported overseas prior to both.
Chinese iron ore stockpiles
Iron ore stockpiles in 18 portside locations in China recorded a five week high rising by 1.56 Mt to 67.3 Mt in the week ending May 10, according to data gathered from U-Metal. This represents the biggest weekly rise for three months.
South Korea’s automobile production
According to the latest figures released by the Ministry of Trade, Industry and Energy, South Korea’s automobile output decreased 4.5% to 1.5 million units year-on-year in the first four months of 2013. Industrial production
Asian demand for Saharan Blend rises
Asian buyers are increasing their intake of Algerian Saharan Blend in May, reports Argus. China is set to import 70 kb/d this month, its first Saharan Blend imports since February. Buyers in Asia-Pacific loaded 100 kb/d in April, a nine-month high. Meanwhile the US is due to take at least 60 kb/d, compared to 80 kb/d in April. European refiners have dominated this market so far this year, taking nearly three-quarters of loadings in January-April, up from less than 45% a year earlier.
China's economic data for April
According to the National Bureau Statistics, China’s electricity production rose by 6.2% from a year ago to 399.4 billion kWh in April. This was well above the growth rate of 2.1% in March. Meanwhile, the country’s industrial production rose by 9.3% year-on-year in April, accelerating from a 7-month low in March, but it was still less than market expections of a 9.5% rise, according to Reuters.
Higher domestic demand to reduce Indian diesel exports in May
Indian diesel exports are expected at 1.3 to 1.7 million MT (c. 310 – 406 kb/d) this month, a significant drop from the 1.9 million MT (c. 454 kb/d) shipped in April, as domestic demand rises, according to Reuters. Rising temperatures during the dry season are expected to increase use of the fuel in generators that power air-conditioning units and irrigation pumps.
IOC plans supply deals with Latin American oil producers
State-run Indian Oil Corporation (IOC) intends to sign term supply deals with Colombia, Venezuela and Brazil during the current financial year, reports Reuters. The move follows a recommendation from a parliamentary committee that India needs to diversify its crude oil sources to avoid supply disruption. IOC also plans to sign term contracts with Qatar and Dubai.
Canadian coal exports in the 1q13
Canadian coal exports (excluding cargoes to US) in the 1q13 were flat from the previous quarter at 8.7 Mt, but were 18% higher than the corresponding period in 2012, trade statistics show. Long-haul shipments from Canada to Japan rose by 28% year-on-year to 2.3 Mt in the 1q, while exports to China were unchanged from the year-ago level, at almost 2.0 Mt.