September US Steel Imports Over 3 Mt for Ninth Consecutive Month
US imports of steel in September climbed to 3.36 Mt, according to American Iron and Steel Institute data, remaining above 3 Mt for the ninth successive month. This takes the year-to-date total to 30.7 Mt and means that it is increasingly likely that the annual total will exceed 40 Mt for first time ever in 2006. The latest data shows that there is no real sign as yet of slowing import demand in the US.
Nigerian Protesters To Leave Oil Stations
Nigerian villagers who took over 4 oil pumping stations in the country were set to leave on Thursday after securing assurances of more benefits from Western oil companies, reports Reuters. Royal Dutch Shell and Chevron were forced to shut the 4 facilities on Wednesday, adding about 100k b/d in lost output to the 500k b/d already shut by militant attacks in another part of the Niger Delta. The incident underlined fears that violence which hit operations on the western end of the wetlands earlier this year could be spreading east to Rivers and Akwa Ibom states, which pump around 1m b/d, reports Reuters.
Kuwait To Cut Oil Output by 100k b/d
Kuwait has said it will cut oil output by 100k b/d starting on 1 November in line with the OPEC decision to reduce overall production by 1.2m b/d, reports AFP. Kuwait, which holds about 10% of the world's oil reserves, has been pumping some 2.6m b/d against an OPEC quota of 2.247m b/d, reports AFP.
US Oil Stocks Fall
US gasoline stocks dropped another 2.8m bbl last week to 207.4m bbl but remained 5.9% higher year-on-year, according to the latest data from the US Department of Energy. The fall came due to a significant decline in gasoline production to 8.7m b/d, the lowest since the week ending 28 April 2006, and a 213k b/d rise in demand to over 9.5m b/d. This was despite a 281k b/d rise in imports to 957m b/d. Distillate stores fell another 1.4m bbl to 144m bbl but remained 19% higher on the year. Imports were down slightly at 241k b/d, 53% lower on the year, while demand slumped 246k b/d to 4.28m b/d. Crude stocks also dropped 3.3m bbl to 332.3m bbl due to a 936k b/d fall in imports to 9.49m b/d, the lowest since the week ending 17th March 2006. Refinery utilisation inched 0.1% lower at 86.2%, the lowest since the 7th April 2006.
Chinese GDP Growth Predictions
China's National Development and Reform Commission predicts that the country's economy will grow by 10.6% in 2006 with growth next year moderating to under 10%. In a report published in the China Securities Journal, the Commission argued that the country's economy was "moving in the direction of a soft landing." Annual GDP growth peaked in the 2q06 at 11.3% before easing to 10.4% in the 3q06.
Vessel Queue at Newcastle
The current vessel queue at Newcastle stands at 32 vessels, while the average waiting time is estimated at 13 days, reports McCloskey. However, shippers have been warned that the queue at the terminal could approach a record 60 vessels in November, exceeding the peak of 56 at the port in 2004. This is due to planned maintenance, which is expected to cause six days of outages and reduce forecast system capacity to a lower than average 6.2 Mt for the month. Yesterday, the SSY Australian Coal Port Congestion Index, which takes into account delays at all coal ports in Australia, stood at 7.19 days compared to 7.13 days last week.
Meanwhile, Newcastle port operator, PWCS, reports that shipments increased close to target levels last week. Latest shipments represented an annualised rate of 85.76 Mt against an October target of 86.4 Mt.
India's Product Exports and Crude Imports Grow In September
India's oil product exports increased 54.9% in September year-on-year to 0.64m b/d with diesel exports climbing 51% during the year to reach 1.22m tonnes, reports Dow Jones. Gasoline exports surged 95.4% on the year to 72.3k b/d. Due to government rules, any refining surplus is targeted for exports to prevent a flood in the domestic market. India's crude oil imports in September grew 4.7% year-on-year to 2.15m b/d while imports during the April-September period were up 12% on the year. Product imports totalled 1.22m tonnes, around 0.3m b/d, in September, up 4.5% on the year. The country imports 76% of the crude it processes, reports Dow.
Richards Bay Shiploader Returns to Operation
One of the two shiploaders idled at Richards Bay following the discovery of cracks in the apparatus on October 12 has returned to operation, McCloskey reports. The move means that shiploaders at berths one, three and four are now fully operational, while the berth two shiploader is due to return to service on October 27. Platts quoted an industry source who claimed that around 1 Mt of exports was expected to be lost as a result of the stoppages.
Saudi Arabia Cuts Oil Supplies
Top oil exporter Saudi Arabia has told core customers in Asia and the US it will cut supplies by 380k b/d from the beginning of next month, making good on OPEC's pledge to implement its first formal output cut since 2004, reports Reuters. Asian refiners have been informed they will be receiving up to 8% less, or around 280k b/d, oil in Nov. As yet, there has been no confirmation of cuts from other OPEC members such as Kuwait, United Arab Emirates and Iran, which are also to curb exports, although not as deeply as Saudi Arabia, which shoulders the largest share of OPEC production, reports Reuters.
OPEC cuts output by 1.2mb/d
On October 18, the Organisation of the Petroleum Exporting Countries agreed to cut production by 1.2m barrels a day. The move is aimed at defending $60/barrel (for WTI) and $55 for Brent crude as its new minimum international price. The reduction was about 20% more than the market largely expected and will mean an official quota for 26.8mb/d for OPEC 10 (but actual output of 26.3mb/d from September levels). The action will be fully implemented on November 1 and OPEC is due to meet again in early December when it will discuss the possibility of a further 500Kb/d cut. In its latest edition of the Monthly Shipping Review, SSY examines OPEC's current position and the effects such a cut could have on the tanker markets for the coming months. The MSR examines the tanker and dry shipping markets plus gas, chemicals and container sectors in detail. It is available from SSY Consultancy & Research Ltd for an annual subscription of
Brazilian Iron Ore Mine Protest
A group of 200 protesting native Americans have agreed to end its occupation of an iron ore in northern Brazil after three days, Reuters reports. The protestors' action at the Carajas mine had brought mining and rail operations to a halt at the cost of 500,000 tonnes of iron ore, according to CVRD estimates. The dispute reportedly centred on the size of payments received by native Americans from the mining company. Last year, output at the Carajas mine was 72.5 Mt.
September World Steel Output Up 9%
According to the International Iron and Steel Institute's latest data, world steel production for September rose 8.8% year-on-year to 101.4 Mt. Year-on-year growth was recorded both in traditional steelmaking centres, such as the US (+3.5%), the FSU (+4.0%), Japan (+4.8%) and the EU-25 (+2.5%), as well as in China (+18.5%) and India (+5.2%). In the first nine months of the year, global output was up 9.3% to 903.4 Mt, with China alone accounting for 308.4 Mt.
China's GDP +10.4% in Q306
China's economy grew by 10.4% in the 3Q06, down 0.9% from the record growth seen in the 2Q06, as government attempts to slow the economy took effect, reports the BBC. The government has raised interest rates twice this year and cut approvals for new business investment as it tries to prevent the economy overheating. Four consecutive years of growth at over 10% have seen China pass Britain to become the world's fourth largest economy. The latest data put inflation at 1.3% and showed industrial output slowing, reports the BBC.
Steel Production in China
China's steel production in September reached 36.16 Mt, the fourth successive month that output has exceeded 36 Mt. If confirmed, the September total, a preliminary figure, would bring the Jan-Sep total to 307.9 Mt (up 21.3% year-on-year) and moves the annualised total to 410.5 Mt compared with the 2005 total of 348 Mt.
US Gasoline and Distillate Stocks Slump, Crude Grow
US gasoline stocks plunged 5.2m bbl to 210.2m bbl due to imports slumping 394k b/d to 676k b/d, the lowest since 25 November 2005 and 56% lower year-on-year, according to the latest data from the US Department of Energy. Gasoline demand was up 56k b/d at 9.3m b/d. Distillate inventories also plummeted 4.5m bbl to 145.4m bbl, but remained 18.5% higher on the year. With imports relatively unchanged at 271k b/d, the drop came due to a 202k b/d rise in demand to almost 4.53m b/d, while production fell 134k b/d to 3.85m b/d. This followed a decline in refinery utilisation rates to 86.3%, the lowest since 14 April 2006. Crude stocks grew 5.1m bbl to 335.6m bbl, the highest since 30 June 2006, and 7.55% higher on the year, due to a 66k b/d rise in imports to 10.43m b/d and 483k b/d lower inputs to refineries.
September Minor Bulk Imports Into China
A number of minor bulk imports into China had a strong month in September, indicating that industrial activity remains strong. Latest customs data from China show that after slipping in the 2q06, imports of alumina into the country rebounded strongly in the 3q06, averaging 644,000 tonnes per month, making the 3q06 the highest quarter ever. Meanwhile, Chinese scrap steel imports in September surged to 529,000 tonnes, the highest-ever monthly total. Imports of copper concentrates into China in September reached 380,000 tonnes, up from 280,000 tonnes in August.
World Oil Demand Up 2.8% In September
Global oil demand grew 2.8% in September year-on-year, the largest increase of the year, to reach 85.33m b/d, reports Energy Intelligence. Demand is forecast to rise by just over 2% in the 4Q06 versus the 4Q05, but this growth requires some fuel switching, mainly in the US, to be achieved, said Energy Intelligence. The increases are due partly to lingering summer demand fuelled by falling oil prices and continued economic growth, but mostly due to low demand in 2005 resulting from the hurricane-triggered high prices. Total OECD stocks are projected to rise again in September, the fifth straight monthly increase, to 2.74m bbl. Oil stocks are high in both the US and Asia having risen 6% year-on-year to 1.34m bbl and 458k bbl respectively in September. However, stocks in Europe are down slightly on the year at 947k bbl. Total global commercial stocks reached 5.14m bbl by the end of the month. Global supply averaged 85.71m b/d in September, up 2.5% year-on-year, reports Energy Intelligence.
Australian Drought Prompts USDA Forecast Cut
The US Department of Agriculture has cut its 2006/07 (Oct-Sep) wheat export forecast for Australia in response to drought conditions in the east of the country. The USDA export forecast is now 13.0 Mt compared with last month's 2006/07 projection of 17.5 Mt. In 2005/06 the USDA estimated Australian wheat exports at 15.2 Mt. As a result, the USDA has raised export forecasts for Canada (from 19.0 Mt to 20.5 Mt), the EU-25 (from 15.5 Mt to 16.0 Mt), Argentina (from 8.5 Mt to 9.0 Mt) and the US (from 25.5 Mt to 26.0 Mt). World exports are now expected to total 111.8 Mt in 2006/07 compared with the September forecast of 112.7 Mt and the 2005/06 estimate of 113.5 Mt. The USDA notes that wheat shipments from Australia to the Mediterranean are likely to be reduced in favour of shorter-haul voyages to Asian destinations.
OPEC Cuts Call For Its Crude In 4Q06
OPEC has cut its forecast for demand for its crude in the 4Q06 to an average 28.7m b/d in its October report, a downward revision of 0.2m b/d versus last month. In 2007, the call on OPEC crude is expected to average 28.1m b/d, a 0.6m b/d decline versus 2006. Non-OPEC supply is projected to average 51.3m b/d in 2006, up 1.1m b/d from 2005. In September, OPEC output averaged 29.7m b/d, a drop of 0.1m b/d month-on-month. Preliminary data for August and September puts total non-OPEC supply at around 51m b/d and 51.7m b/d, year-on-year growth of 0.9m b/d and 2.8m b/d respectively. Non-OPEC output is estimated to reach 53m b/d in 2007. The main contributions are expected to come from the FSU, Africa and N. America. OPEC has forecast world oil demand growth for 2006 at 1.2% to average 84.2m b/d, and at 1.5% in 2007. OPEC is set to meet on Thursday in Qatar to work out details of a 1m b/d cut in output, the groups first plan to reduce supply in two years, reports Reuters.
China To Begin Filling Second Oil Reserve
China will begin pumping crude oil into tanks at its second oil reserve by the end of the year, a move likely to raise demand further following record oil imports of 3.29m b/d in September, reports Associated Press. The first phase of oil reserve facilities at Zhoushan, south of Shanghai, will have storage capacity of about 7.5m bbl. Shipments to the first reserve, at Zhenhai, began in August. When completed, China's 4 aboveground storage facilities will have total capacity of about 100m bbl.
Two Norwegian Oil Platforms Shut
Statoil ASA and Royal Dutch Shell are immediately halting production at two oil and gas platforms off the coast of Norway which pump 280k b/d, or about 10% of the country's oil output, reports Bloomberg. The closures follow an order from the country's Petroleum Safety Authority telling the companies to close the Snorre A and Draugen platforms because their lifeboats are too weak. Snorre A, in the North Sea, pumps about 115k b/d and also gets 85k b/d from the nearby Vigdid field, while Shell's Draugen field in the Norwegian Sea produces about 80k b/d. Norway's production will be reduced for at least a week as the companies improve their lifeboats, reports Bloomberg.
Pre-emptive Production Cuts by US Steelmakers
Some US steel producers have started to cut production in a bid to support prices. Macquarie Bank says the moves by Mittal Steel and US Steel to idle blast furnaces are pre-emptive, as prices are still relatively high. The report adds that the selling price of hot-rolled coil has fallen to around $650/t from $698/t in late July, compared with the last time production cuts were implemented (1h05), when the selling price of hot-rolled coil dropped below $450/t. The steps are a result of (1) indications of weaker end-user demand in the US (the Wall Street Journal reports an increase in domestic steel inventories, while car manufacturers are also cutting production), and (2) a surge in imports of steel product into the US.
US Crude and Gasoline Stocks Rise, Distillates Fall
US crude stocks grew another 2.4m bbl last week to 330.5m bbl, 7.9% higher year-on-year, despite a 149k b/d fall in imports to 10.36m b/d, according to the latest data from the US Department of Energy. This was as refinery utilisation dipped further to 89.2% due to maintenance work. Gasoline inventories inched another 0.3m bbl higher to 215.4m bbl, 11.7% higher on the year, regardless of a 44k b/d drop in imports to just under 1.1m b/d, 25.2% lower than the same week last year. Gasoline demand rose 161k b/d to 9.2m b/d. Distillate stocks fell 1.6m bbl to 149.9m bbl, but remained 20.3% higher year-on-year as imports dropped 36k b/d to 268k b/d and demand rose 104k b/d to over 4.3m b/d.
Chinas Crude Imports Rise In September
China's crude imports surged 20.5% in September year-on-year to an average 3.2m b/d having risen 401k b/d on the month, according to preliminary data from China's Customs Statistics. Product imports dipped 57k b/d from August to 838k b/d but remained 24.1% higher on the year.
China Imports 28.1 Mt of Iron Ore in September
According to preliminary data from China's Customs Statistics, China imported 28.14 Mt of iron ore in September. While this stands below August's record monthly import total of 32.18 Mt, it is still higher than the monthly average for 2006. The January-September import figure is 247.2 Mt (+48.2 Mt year-on-year), with the annualised total for 2006 now 329.5 Mt.