Light Spring Refinery Maintenance Planned For Europe
European refiners are planning a light turnaround season this spring due to many of them having carried out major overhauls leading up to the reduction of sulphur in transport fuels in the EU in Jan '05, reports Petroleum Argus. Refiners have also been experiencing the most profitable 6 months for many years so are keen to utilise all available capacity. Crude distillation unit shutdowns in the first half of 2006 will be down nearly 9%, or 164k b/d, from a year earlier. The heaviest maintenance schedule is in March with around 529k b/d expected to be shut down, 57% of that taking place in NW Europe, and 40% in the Med. This is to coincide with diminishing demand for heating oil as temperatures begin to rise, but ahead of the summer driving season when gasoline demand peaks, reports Argus.
US Steel Import Demand Remains Strong
Statistics from the US Commerce Department reveal that US steel imports declined in December on a year-on-year basis but increased over the previous month, Metal Bulletin reports. December imports totalled 2.7 Mt, down from 2.9 Mt in December 2004 but up from 2.4 Mt in November 2005. Officials from the American Institute for International Steel cited strong underlying economic growth factors, job creation and low steel inventories as reasons behind robust levels of US steel consumption, with some consumers indicating that they need imports to increase further in response to market conditions.
IEA Lowers Global Oil Demand Growth Forecast
In its February report the International Energy Agency lowered its forecast for global oil demand growth for 2006 to an increase of 1.78m b/d over '05, as opposed to its previous projection of 1.83m b/d. OECD total industry oil stocks fell 65m bbl in Dec due to cold weather boosting crude demand in the Pacific as refiners increased throughputs and drew stocks to keep up with the higher demand for distillates. Crude inventories fell in Japan and Korea due to cold weather encouraging refiners to run at close to record rates. World oil supply fell 135k b/d in Jan to 84.6m b/d due to weather related disruptions and ongoing interruptions to supply from Nigeria and Iraq cutting supplies by 450k b/d. However, these were slightly offset by increases from North and Latin America, Asia and Africa.
January Australian Coal Exports Fall
Australia's coal exports fell in January year-on-year, according to the preliminary port data quoted by McCloskey. January coal shipments totalled 20.08 Mt, down from the 20.56 Mt recorded during the same month last year. The slower start to the year has been attributed to a combination of maintenance and repair work at Gladstone, Hay Point and Newcastle.
Australian Port Congestion Builds
The SSY Australian Port Congestion Indices show significantly higher levels of congestion at the country's iron ore and coal ports. Average delays at west coast iron ore ports currently stand at 8.6 days - the highest level for 18 months, according to the SSY index. Average delays at east coast coal ports have now risen to 10.0 days, the highest for seven months. In the last month Australia's coal ports have been hit by various operational difficulties, including a shiploader at Hay Point being out of service until March and a reclaimer breakdown at Newcastle's Kooragang terminal.
US Gasoline Stocks Continue To Grow, Crude and Distillates Down
US gasoline stocks jumped another 4.3m bbl last week to 233.3m bbl, the highest since the week ending Mar 4 '05, but only 3% up on the year, the latest data from the US Department of Energy shows. Levels have continued to grow despite demand increasing by 88k b/d over the last week due to a 27% rise in imports to 1.2m b/d. Crude stocks inched 0.3m bbl lower to 320.7m bbl, despite imports rising by 264k b/d over the week to 9.9m b/d. Distillate inventories also dropped 0.3m bbl to 136m bbl but remained 17.6% higher than the same week last year. The fall came despite an 11k b/d rise in imports to 388k b/d, which took levels over 50% higher year-on-year, due to a 59k b/d rise in demand. Refinery capacity was back down at 85.8% due to continued maintenance.
Rise in Brazil's Soyabean Exports Forecast
Abiove, the Brazilian Vegetable Oils Industry Association, predicts that Brazil will export 24.5 Mt of soyabeans in 2006/07, the American Soybean Association reports. This would represent a rise from the 22.4 Mt expected in 2005/06. Exports of soyameal are set to remain relatively constant, falling slightly to 13.4 Mt in 06/07 from 13.9 Mt in 05/06. The ASA also reports that Brazil's Agriculture Ministry forecasts annual soyabean exports of 31.7 Mt by 2014 with the country's soyabean production boosted by increases in planting areas and crop technology.
Global Oil Demand Rises In Jan
Global oil demand grew 1.7% year-on-year in Jan to 83.98m b/d despite dropping 2.36m b/d month-on-month, reports Energy Intelligence Briefing. Cold weather in Europe and Asia and strong economic activity pushed demand growth above the 1.4% annual increase in Dec and 1% rise in Nov, despite the high oil prices and another month of falling demand in the US. The bulk of the Jan growth came from developing economies which accounted for 1.1m b/d, while established OECD economies contributed 300k b/d. Global supply outstripped demand by nearly 2m b/d having risen 2.6% over the past year to 85.95m b/d.
Newcastle Throughput Impacted by Reclaimer Breakdown
Throughput at Newcastle during the past week has been hit by the breakdown of a reclaimer at the Kooragang terminal, McCloskey reports. According to data from Port Waratah Coal Services, weekly shipments were 1.50 Mt compared with 1.68 Mt in the week before. The vessel queue at Newcastle now stands at 23 (up from 21 last week) with the estimated average waiting time of 7.9 days.
Indias Product Exports Rising
Indias product imports have been running at nearly 450k b/d since Nov compared with just over 350k b/d for most of last year, reports Petroleum Argus. Indian demand grew by 20k b/d to 2.3m b/d in Jan-Nov last year, with a heavy and drawn out monsoon season and the flooding of major demand centres crimping transport fuel demand. This
contributed to a 6% rise in product exports to approximately 360k b/d. High export margins have encouraged most Indian refiners to run at over 100% of nominal capacity for several months, leading to strong exports of all products. Despite a robust Indian economy encouraging oil demand growth this year, demand is unlikely to outstrip refiners capacity expansions for 06, resulting in more exports, reports Argus. The countrys largest refiner, IOC, is to double capacity at its 120k b/d Panipat refinery by the end of March, while Essar will start up 156k b/d of capacity at its new Vadinar plant in the second half of the year.
Disruption to Australia's Coal Railings
A 24-hour strike by employees of Queensland Rail is expected to halt railings to Queensland's coal ports, according to McCloskey. The industrial action is scheduled to end at midnight on Friday. Elsewhere in Queensland, throughput at Gladstone has been hampered by repair work on a loader, scheduled to be completed on February 9, while at Hay Point a shiploader will be out of service until early March.
Japan's Crude Imports Rise In '05
Japan's crude imports inched 0.7% higher in '05 to an average 4.23m b/d, with Saudi Arabia gaining market share at the expense of the United Arab Emirates and Iran, reports Petroleum Intelligence Weekly. Imports from Saudi Arabia rose 19.2% to an average 1.23m b/d, edging above the UAE, which saw its volumes drop 2.6 % to an average 1.03m b/d. Third-placed Iran also saw its levels drop by 7.7% to an average 0.58m b/d. Imports of sweet grades from Nigeria and Indonesia both slipped, with total imports from these countries dropping 48% and 17.2% respectively, while sour crude supplies from Kuwait and Oman rose.
Contrasting Economic Indicators in France and Germany
The latest economic indicators from the eurozone show contrasting pictures for the French and German economies, the Financial Times reports. Manufacturing output in Germany is enjoying the fastest growth in 18 months, with business confidence improving. In contrast, the French manufacturing sector underwent a "pronounced slowdown" in January. This, in turn, prevented the eurozone's purchasing managers' index from rising despite the positive German data.
FSU Product Exports Rise In Jan
Product exports through FSU ports were boosted in Jan by higher gasoil and naphtha shipments, reaching a total of just under 11mt (approximately 2.7m b/d) 7% up on Dec, reports Petroleum Argus. Gasoil exports increased 9.6% on the month due to higher German demand brought on by freezing temperatures, while naphtha shipments jumped 45% due to higher gasoline prices. Lower Asia-Pacific supplies also encouraged FSU naphtha exports. Total fuel oil exports rose 2.7% on Dec due to an increase in shipments from Baltic ports, while Black Sea shipments dropped due to higher domestic demand in the FSU.
Russian Refining Up Last Year
Russian refineries processed 4.15m b/d of crude in '05, 6.2% higher than '04, reports Argus. Refining was the preferred choice for Russian oil companies after high export duties cut into the profitability of crude exports. The total rise in crude processing exceeded crude production growth which was up 2.7%. The country's energy ministry says throughputs could reach up to 4.18m b/d in '06, with a series of new units due on line at Russian refineries, reports Argus.
Derailment Disruption Less Than Feared
McCloskey reports that a derailment on the line to the Richards Bay Coal Terminal has caused an estimated 120,000 tonnes of coal supplies to be lost as a result of the cancellation of 18 trains. This total is less than originally feared. Rail operator Spoornet aims to resume railing on one line by the evening of 1 February with a normalised service on February 2. Earlier, coal exporters claimed that a three-day strike by rail workers had not affected operations at RBCT.
US Gasoline and Crude Stocks Up, Distillate Down
US gasoline stocks jumped another 4.2m bbl last week to 219m bbl, the highest since the week ending Mar 11 05, but only 1.2% up on the year, the latest data from the US Department of Energy shows. Levels have grown over 16m bbl over the last 5 weeks helped by high import levels and despite a 53k b/d rise in demand over the last week. Imports inched 18k b/d higher to 935k b/d, 19.7% higher year-on-year. Crude inventories rose 1.9m bbl to 321m bbl, 8.7% higher than the same
week last year partly due to a 339k b/d hike in imports to 9.6m b/d, although levels remain 2.9% lower on the year. Distillate imports plummeted 46.2% from last weeks high levels to 377k b/d resulting in a slight 0.2m bbl dip in stocks despite an 83k b/d drop in demand. Levels are now 136.3m bbl, 14.9% up on last year. Refinery capacity improved by 0.8% at 87%, although some refineries continued to undergo maintenance.
South African Rail Strike
Opinion appears divided as to the amount of disruption to Richards Bay shipments caused by a three-day rail strike due to end on Wednesday. Reuters reports trade union claims that Richards Bay Coal Terminal is operating at 30% capacity. According to Platts however, a spokesperson for RBCT was quoted claiming the trains are "getting through as normal." A spokesperson for rail operator Spoornet said that the company had rearranged the railing schedule to minimise disruption.
Rise in Coal Exports through Baltic & North Russian Ports
Russias coal exports climbed to 65.1 Mt in 2005, marking a rise of 5.2 Mt on the previous year, according to McCloskey. Export growth was underpinned by a jump in throughput at Murmansk, where 2005 shipments totalled 11.0 Mt, up 2.2 Mt on 2004. Meanwhile, exports through the Estonian port of Tallinn rose from 2.3 Mt in 2004 to 4.1 Mt in 2005. In contrast, coal exports from Russias Pacific coast ports fell 0.8 Mt to 14.4 Mt.
IGC Lowers 2005/06 Coarse Grain Trade Forecast
The International Grains Council has lowered its forecast for the world coarse grain trade in 2005/06 from its last prediction in November by 1.0 Mt to 102.1 Mt. However, the new forecast is still higher than the 2004/05 estimated total of 101.6 Mt. The IGC reduced its projections for exports from the US (-1.1 Mt to 53.2 Mt) and Argentina (-0.9 Mt to 13.6 Mt), but increased its prediction for Chinese exports by 1.0 Mt to 6.0 Mt.
Good 4q for Polish Coal Exports
Poland's coal exports in 2005 reached 18.6 Mt, marking a fall of 0.1% on the 2004 total, according to McCloskey. The total was achieved as a result of a surge in exports in the 4q05; exports in the first three quarters of 2005 were down 1.5 Mt year-on-year. The clear majority of Poland's exports comprised steam coal (15 Mt), with YOY increases in exports in evidence to France (+0.7 Mt to 1.2 Mt) and the UK (+0.25 Mt to 1.6 Mt). This offset YOY declines to Denmark and Finland.
Reduced Throughput at Hay Point
According to a report from McCloskey, another accident at Hay Point resulted in both ship loaders at the port being put out of service over the weekend. Ship loader 1 has been out of operation since an accident on December 28, and repairs are expected to be completed by early March. Ship loader 2 was damaged late last week, and indications are that repair work will take at least 3-5 days. McCloskey reports that both incidents will reduce port throughput by approximately 2 Mt. In 2005, some 33.5 Mt of coal were exported from the terminal.
India's Oil Refinery Throughput Up In Dec
Indias oil refinery throughput rose 8.8% in Dec to 272k b/d due to a low base line figure in the year-earlier period and expectations of higher demand, reports Reuters. Indian Oil Corp. (IOC), the countrys largest refiner, reported 20% growth in refinery production after its output in Dec '04 was hit by regular maintenance at its Panipat refinery and a blast at a unit of its Koyali refinery. However, lower throughput was reported from its Mathura refinery, where one unit was shut down for 3 days, and its Barauni refinery, where output declined on lower demand. Demand is forecast to grow 3-4% in '06, prompting refiners to raise production. Indias crude output, which meets 30% of domestic demand, dropped 8.1% to about 624k b/d having been hit by a fire at an offshore platform in '05, reports Reuters.
High US Soyabean Sales
Export sales of US soyabeans have reached as much as 1.35 Mt during the past week alone, according to a market report from the Chicago Board of Trade. This was far in excess of both market expectations and last week's sales total of 448,000 tonnes. Traders anticipate that Chinese buyers may soon increase their purchases from Brazil, where harvesting has started for a crop forecast by the US Department of Agriculture to reach a record 58.5 Mt in the 2005/06 crop year.
China's Dry Bulk Imports Climb Above 400 Mt in 2005
Imports of major dry bulk cargoes into China in 2005 climbed to 404.1 Mt compared with the 2004 total of 328 Mt, according to China's Customs Statistics. The figures highlight the astonishing increase in China's dry bulk imports over the last five years, representing a massive rise of 275 Mt from the 2000 total.
All-time highs were recorded for Chinese imports of coal (26.1 Mt), alumina (7.02 Mt) and grain (32.9 Mt) as well as for iron ore (275.2 Mt).
The year ended with high levels of dry bulk imports arriving in the country. Monthly imports of coal, grain, iron ore and steel products exceeded 34 Mt in both November and December compared with 27-28 Mt during the same month in 2004. Over the course of the year, China emerged as a marginal net exporter of steel products by some 0.4 Mt in contrast with last year's net imports of 12.9 Mt.