Chinese Steel Inventories Decline Further
Steel inventories at major Chinese cities have continued to fall, dropping by 0.1 Mt week-on-week to 9.1 Mt on 27 November, according to data from U-Metal. This is the seventh week in succession steel stocks have decreased on a weekly basis, they are now at their lowest level in over six years.
Asia’s imports of Iranian crude fall to 2-year low in October
Asian imports of Iranian crude oil in October fell by 74K b/d y-o-y to 803K b/d, Reuters reports citing government and tanker tracking data. Shipments to China were relatively unchanged y-o-y at 338K b/d. However, India’s imports fell by 129K b/d (41.5%) from October 2014 levels to 181K b/d. Japan’s imports slipped by 10K b/d y-o-y to 163K b/d. South Korea was the only major Asian importer to see a rise in volumes, with its crude imports from Iran almost doubling to 131K b/d. Over the first 10 months of 2015, Asia’s imports of Iranian crude have declined by 70K b/d y-o-y to 1.04M b/d.
Chinese Industrial Profits Fall
Profits at large Chinese industrial enterprises fell on an annual basis for the fifth month in succession in October, according to National Bureau of Statistics data reported by Reuters. Falling sales, rising costs and weakness in the steel, coal and oil sectors contributed to a 4.6% fall in profits in October, compared with a drop of 0.1% in September.
Colombian Night Coal Railings Ban Lifted
A Colombian court has lifted the night-time ban on coal movements on the country’s main railway, potentially enabling exporters to increase coal shipments, Bloomberg reports. Restrictions on coal movements between 10.30pm and 4.30am had been put in place in response to concerns about noise pollution and had cut transport capacity on the railway by around 25%.
Japan’s JX crude processing rise m-o-m but falls y-o-y
Japan’s largest oil refiner JX Nippon Oil and Energy Corporation expects to process 1.11M b/d of crude for domestic consumption in December, up from 983K b/d in November, Reuters reports. However, December’s volume is still down by 3% y-o-y.
China’s Sinochem receives export quota
China’s Sinochem has become the first refiner outside of Sinopec, PetroChina and CNOOC to receive an oil product export quota, Reuters reports. The firm received an export allowance of 450KT for this year of 200KT of gasoline, 150KT of diesel and 100KT of kerosene. No quota has been awarded for 2016 as of yet. More independent refiners are expected to receive export quotas moving forward as China reforms its energy sector.
Iraq’s Basrah crude exports rebound towards record in November
Iraqi crude oil exports from the country’s southern terminals have so far in November averaged 3.08M b/d, Reuters reports. Iraqi Oil Ministry data shows that Basrah exports previously peaked in July, at a record 3.06M b/d. The volume represents a 300K b/d increase on October exports, which were slowed by poor weather conditions.
China’s Daily Crude Steel Output Rises
Daily crude steel output at China Iron and Steel Association member mills climbed to the highest level since early October in the first ten days of November at 1.69 Mt, according to data from the industry association reported by U-metal. This is the first time it has risen above the respective year-ago level since mid-May.
Steel Trade Update
After falling to a 21-month low of 2.6 Mt in September, US steel imports rose only marginally to 2.7 Mt in October, which was still down by 1.3 Mt year-on-year, according to US Census Bureau data. Imports for January-October fell by 3.0 Mt on the same ten months in 2014 to 30.6 Mt.
Meanwhile, Japan’s steel exports rose to a three-month high of 3.4 Mt in October, but this was still 0.2 Mt below the year-on-year level, according to data from the Japan Iron and Steel Federation. The annual decline was largely due to a drop in shipments to destinations in Asia, with exports to South Korea, China and Taiwan all falling year-on-year. Total exports for the ten months to October were down 0.2 Mt year-on-year at 34.8 Mt.
Chinese Minor Bulk Imports
Chinese imports of bauxite, alumina, steel scrap, fertiliser, wood pulp and nickel, manganese, copper and chromium ores combined fell to a four-month low of 14.6 Mt in October, however, this was still up 2.0 Mt year-on-year, according to Chinese customs data. Nickel ore imports declined by 0.8 Mt year-on-year in October to the lowest level since May at 3.3 Mt while, in contrast, bauxite imports rose by 1.9 Mt to 4.5 Mt.
US Steel Price Plunges
The US domestic price for hot rolled band (HRB) plunged by $31/t in the two weeks to 25 November to $417/t, its lowest level since the end of 2003, according to the latest SteelBenchmarker from World Steel Dynamics. There was a similarly sharp fall, of $21/t, in the Western European domestic HRB price over the same period to a twelve-year low of $346/t. Meanwhile, the Chinese HRB price dropped to its lowest level since the current data series began in January 2000 at $238/t, down $6/t.
US distillate stocks rise
US distillate fuel oil stocks rose by 1M bbls w-o-w to 141.4M bbls in the week ending 20 November, according to the US EIA. US East Coast distillate inventories were up by 139K bbls from the prior week to 61.2M bbls, the highest since September 2011. US gasoline stocks increased by 2.5M bbls w-o-w to 216.7M bbls.
US crude inventories close in on record high
US crude oil inventories rose by 1M bbls w-o-w to 488.2M bbls in the week ending 20 November, according to the US Energy Information Administration (EIA). This is marginally below April’s record high of close to 491M bbls. US crude imports were up 365K b/d w-o-w to 7.3M b/d. US crude runs rose by 304K b/d from the prior week to 16.4M b/d, the highest since August.
US 3q15 GDP Growth Revised Up
The US Department of Commerce has revised up its estimate for US 3q15 GDP growth by 0.6 percentage points to 2.1% year-on-year, citing a smaller than initially thought decrease in private inventory investment as the reasoning behind the revision. However, this is still down from growth of 3.9% in 2q15.
Japan Flash Manufacturing PMI
The Nikkei Flash Japan Manufacturing Purchasing Managers’ Index, published by Markit, rose to 52.8 in November, up from a final October reading of 52.4 and its highest level since March last year. Growth in new export orders rose to a five month high on strong foreign demand while buying activity and employment both increased at a faster rate.
India’s crude imports from the Caribbean and Latin America hit 9-month high
India’s crude oil imports from the Caribbean and Latin America in October rose by 145K b/d m-o-m and 130K b/d y-o-y to average a 9-month high of 846k b/d, Reuters reports, citing preliminary government and tanker tracking data. Imports from Asia also increased, with volumes more than doubling m-o-m and rising 76K b/d y-o-y to 187K b/d, the highest since April 2014. Imports from the Middle East were relatively unchanged, rising 20K b/d m-o-m but falling 22K b/d y-o-y to 2.2M b/d. Imports from West Africa slipped by 38K b/d in the month but climbed 226K b/d y-o-y to 643K b/d, with volumes supported by higher imports of Angolan crude.
Chinese Coal Imports Breakdown
China’s steam coal imports (incl. anthracite) fell to their lowest level since March 2011 in October at 7.3 Mt, down 3.4 Mt year-on-year, according to customs data. Coking coal imports declined by 2.4 Mt over the same period to a five-month low of 3.1 Mt.
Chinese Iron Ore Imports by Source
Of the 75.5 Mt of iron ore China imported in October over 84% was sourced from Australia and Brazil, although both countries recorded year-on-year falls of approximately 1 Mt to 48.5 Mt and 15.3 Mt, respectively, according to China Customs. In contrast, there were small annual increases in cargoes from South Africa and Canada to 3.3 Mt and 1.0 Mt, respectively. October iron ore imports from West Africa rose slightly from September’s near three-year low, of 0.7 Mt, but were still down 0.8 Mt year-on-year at 0.9 Mt.
China’s crude imports from the Middle East fall to five-month low
China’s crude oil imports from the Middle East in October dropped by 471K b/d m-o-m and were essentially unchanged y-o-y at 3.17M b/d, the lowest since May, data from the country’s General Administrations of Customs shows. This accounted for the majority of the 598K b/d m-o-m decline in China’s overall crude imports of 6.23M b/d. Imports of West African crude were up by 59K b/d and 24K b/d to 1.09M b/d. Imports from the Caribbean and Latin America slipped by 19K b/d m-o-m but were 207K b/d higher y-o-y to 809K b/d. Notably, imports from Asia hit a 27-month high of 193K b/d, due to higher volumes from Australia and Indonesia as well as an unusual purchase of crude from South Korea.
IGC Raises Latin American Grain Export Forecasts
The International Grains Council (IGC) has raised its forecast for Argentine and Brazilian soyabean exports in the 2015/16 harvest year (Oct-Sep) for the second month running, citing abundant supplies and increased demand from China. Brazilian soyabean exports are now forecast at 55.0 Mt, up 0.5 Mt, and Argentine shipments at 11.6 Mt, up 1.6 Mt. Growth in Chinese domestic soyabean demand is primarily being driven by the feed industry, the IGC reports, with annual consumption forecast at a new high of 93.8 Mt in 2015/16 and imports predicted to total a record 81.0 Mt.
Colombian Steam Coal Exports
Colombian steam coal exports rose to 7.1 Mt in October, up 1.0 Mt year-on-year, according to IHS McCloskey. This was largely due to higher shipments to the Americas, which climbed by 0.9 Mt to 2.2 Mt, while exports to Europe rose by 0.1 Mt to 4.9 Mt.
Canadian Iron Ore Exports
Canadian iron ore exports (excl. US cargoes) rose to a three-month high of 3.5 Mt in September, although this was still down year-on-year, according to the Tex Report.
World Steel Production
World crude steel production fell by 3.1% year-on-year in October to 133.6 Mt, as most major steel producing nations saw further falls in output, according to the World Steel Association. China (-3.1% to 66.1 Mt), Japan (-3.8% to 9.0 Mt), the US (-8.8% to 6.7 Mt) and South Korea (-5.6% to 5.8 Mt) all saw sharp annual declines in production in October. Meanwhile, in spite of higher output in Germany (+2.7% to 3.6 Mt), EU steel output fell by 3.8% in October, to 14.2 Mt. Russian steel was down 2.4% year-on-year in October, to 5.7 Mt, but Indian output returned to growth, rising by 4.9% to 7.5 Mt.
India’s crude imports fall to year-to-date low
India’s crude oil imports in October dropped by 176K b/d m-o-m and 148K b/d y-o-y to average an 11-month low of 3.68M b/d, according to data from the country’s Petroleum Planning and Analysis Cell (PPAC). However, India’s crude imports during the first 10 months of 2015 are still 112K b/d higher than during the same period in 2014 at an average of 3.9M b/d.
India’s oil product exports drop to 5-month low
India’s exports of clean oil products (consisting of diesel, petrol, naphtha and jet fuel) in October fell by 223K b/d m-o-m and 307K b/d y-o-y to 1.01M b/d, the lowest since May, PPAC data shows. Diesel exports accounted for much of the decline, slipping 100K b/d m-o-m and 243K b/d y-o-y to a four-month low of 425K b/d. India’s clean product exports over the first 10 months of 2015 have fallen by 52K b/d y-o-y to 1.09M b/d, as growing domestic demand offsets higher crude runs.