Richards Bay Forecasts 2005 Exports at 66 Mt
Richards Bay Coal Terminal operators forecast that exports in 2005 will total 66 Mt, falling short of the original CY target of 72 Mt, McCloskey reports. The annualised 2005 figure (based on January-July data) is now 64.7 Mt. Throughput continued to disappoint in July, running at 5.3 Mt compared with the month's target of 5.9 Mt.
Drought Hits US Corn and Soyabean Crops
A prolonged period of drought in the US may impact on soyabean and corn exports. According to Fairplay, the Wall Street Journal reports that the dry conditions have left Mississippi tributaries at low
levels, affecting grain transportation. The major grain-growing state of Illinois has been among the worst-hit, reducing corn and soyabean yields. This could threaten to blunt the seasonal upswing in the
Panamax and Handymax markets later in the year.
Coup in Mauritania
The BBC reports that a coup d'etat has taken place in Mauritania with a military council assuming power. Mauritania exports 9 Mt of iron ore a year with Europe the main destination. Were iron ore exports from the West African state to be interrupted, European steel mills would be forced to source from further afield, from suppliers such as Brazil and South Africa, thus stretching tonne-mile demand.
US Gasoline Stocks Fall
US gasoline stocks fell 4m bbl to 205.2m bbl, the latest data from the US Department of Energy showed. Although refinery utilization rose from 93.5% to 95.8%, domestic product output dipped. Gasoline imports slipped by around 39Kb/d but still averaged 1mb/d. Distillate inventories climbed 1.5m bbl to 127.3m bbl. Crude stocks edged up
marginally by 200k to 318m bbl while imports were up 1mb/d at 11m b/d.
Power Shortages Hit China
Soaring energy demand in Beijing has prompted the city's Development and Reform Commission to implement emergency measures to lower electricity usage, Platts reports. Consumption in the city peaked at 10,580 MW in late July (up 11% on last summer's record high). The China Electricity Council has forecast power shortages across much of China in the 3q05, but it predicts the shortfall to ease in the 4q. Coal-fired electricity generation in China during the 1h05 was up 11.8% year-on-year, according to official data.
Improving Business Sentiment in the Eurozone
Business sentiment in the eurozone appears to be improving, according to the latest Purchasing Managers' Index. The Financial Times reports that the manufacturing PMI in July rose to 50.8 from 49.9 in June. This indicates that expectations have switched from contraction to growth. The positive outlook follows news on Friday that the US economy grew at an encouraging annual rate of 3.4% in the 2q05, according to the latest data from the US Department of Commerce. This level of growth was achieved in spite of many businesses de-stocking after building up inventories during the 1q, the BBC reports.
Oil Prices Rally On Saudi Arabia, Refinery Hitches
Crude oil prices are rallying after the death of Saudi Arabias King Fahd heightened concern about the stability of the worlds largest oil exporter, reports Bloomberg. But Prince Turki al-Faisal, Saudi
Arabias ambassador to the U.S said "I dont expect any change in policies, only continuity." Refinery outages in the US have also chased prices higher. BP shut a gasoline producing unit at its Texas
refinery - its largest in the US - for maintenance raising concerns this will limit supplies of gasoline and other fuels. A fire at the same refinery last Thursday reduced the plants overall gasoline
production by 35K b/d, Reuters reported. Problems have also been reported at five other US refineries, according to media reports.
IGC Boosts World Wheat Trade Forecast
The International Grains Council has raised its forecast for the world wheat trade in the 2005/06 trade year (July-June). It predicts global wheat exports will reach 109.0 Mt - up 1.4 Mt from its 05/06 projection made last month. This would surpass the previous high of 108.5 Mt recorded in 1999/2000 and would be 3.1 Mt more than 04/05. The IGC lifted its 05/06 import expectations for the EU-25 (from 7.0 Mt to 7.5 Mt), the US (from 1.0 Mt to 1.3 Mt) and North Africa (from 17.6 Mt to 18.3 Mt).
US Gasoline Stocks Fall
US gasoline inventories fell 2.1m bbl to 203.1m bbl (4% below year ago levels), despite imports of 1.2mb/d -- the highest weekly average so far in 2005, weekly data from the US Department of Energy showed. US gasoline demand has averaged 9.5mb/d over the past 4 weeks, 1.4% higher than in the same period last year. Crude oil stocks rose 2.8m bbl to 320.8m bbl last week, due to higher oil imports and a marginal fall in refinery throughputs. Crude imports averaged 11.1mb/d, the second highest weekly average ever. Refinery utilisation dipped to 95% of capacity compared with 95.8% a week ago. Distillate stocks rose 2.6m bbl to 129.9m bbl, with a 4.3m bbl increase in heating oil stocks.
Meanwhile, global oil demand was up 1.9%, or 1.5mb/d, year-on-year in June at 83.8mb/d, reports Oil Market Intelligence. A third of the July growth came from OECD states (mainly Europe and Asia), while non-OECD countries such as India and China accounted for the other two thirds of the increase. OMI estimates Chinese oil demand growth of 4.5% in July and expects global oil demand to rise by 1mb/d to 83.8mb/d in the 3q05 and by 2.3mb/d to 86.1mb/d in the 4q05. On the supply side, oil output in July rose 2.5% or 2.06mb/d to 85.9mb/d.
US Steel Imports Fall in June Yet YTD Total Higher Than 2004
The American Iron and Steel Institute reports that US steel imports in the 1h05 rose 8.3% from the same period last year to 11.96 Mt. Preliminary statistics from the US Census Bureau show that imports from China, Japan, South Korea and Taiwan in the 1h05 represented an increasing share of US imports - up 66% year-on-year to 2.97 Mt. However, monthly data indicate a downward trend in June: imports into the US in June fell 3.0% from May to 2.33 Mt.
US Consumer Confidence Falls
US consumer confidence fell unexpectedly in July as more Americans worried about their job prospects, the BBC reports. The Conference Board's gauge of consumer sentiment fell to 103.2 from 106.2 in June. Analysts had forecast a reading of 106. Retail spending makes up two-thirds of the US economy, so consumer confidence is an important barometer of economic growth prospects.
However, analysts say that in recent years the link between confidence and retail sales seems to be diverging and surging oil prices may have prompted the dip in consumer morale. Lynn Franco, head of the boards Consumer Research Center, said Julys dip in confidence was "no cause for concern".
"The overall state of the economy remains healthy and consumers outlook suggests no storm clouds on the short-term horizon," she said.
South Korea Crude Imports Up 2.5% In June
South Koreas crude imports were up 2.5% year-on-year in June at 2.2mb/d, despite a fall in Saudi Arabian imports from high levels a year ago, reports Petroleum Intelligence Weekly. Saudi supply dropped 30% as maintenance at a major Korean refinery curbed demand for that type of crude. For the first six months of 2005, Koreas crude imports were up 4.7%, or 101kb/d, compared with the same period in 2004
Indian Iron Ore Prices Rising
Prices for Indian iron ore fines into China have risen from $57-63 per tonne cfr one week ago to $63-66 per tonne as Chinese steelmakers re-enter the market, Metal Bulletin reports. Traders expect further rises over the next week because of increasing demand and the impact of the yuan revaluation on July 21. China's imports of Indian iron ore have tailed off in recent months, falling below 6 Mt in June after peaking at around 8Mt in March.
Australian Port Congestion Falls
Delays at Australia's main dry bulk export facilities have shown some sharp declines. SSY's Combined Index of waiting times in East and West Australia has fallen to an average of 6.7 days, the lowest level since January. Average delays in East Australia currently stand at 8.2 days, an 8-week low. This follows some easing of weather disruptions and compares with almost 11 days just one week ago.
China Raises Domestic Fuel Prices
Chinas National Development and Reform Commission is to raise domestic petroleum retail prices from Saturday, narrowing the gap with
global market prices, reports Dow Jones. Prices will rise 6% to CNY300 a metric ton for gasoline and to CNY 250/ton for diesel. This is the second retail price hike in four weeks. Chinas state-owned oil refiners could find some respite from the hike, having been unable to pass on rising international costs to the regulated domestic market, reports Dow Jones.
China Revalues Currency
China has revalued its currency, the yuan, by 2.1% to 8.11 per US dollar and left the door open to further rises by abandoning the currencys decade-old peg against the dollar, reports Reuters. Letting
the yuan strengthen may help China control inflation by reducing the cost of imported products such as oil and copper, which are priced in
dollars, reports Bloomberg. It also gives the central bank, which has sold yuan to prevent the currency from appreciating, more scope to increase interest rates to cool an economy that expanded 9.5% in Q205, said Bloomberg. However, market analysts surveyed by Reuters viewed the move as modest and likely to have limited economic impact.
China's Economy Showing Robust Growth
China's economy expanded faster than expected in the 1h05, growing by 9.5%, China Daily reports. GDP for the 2q alone was up by 9.5% compared to 1q growth of 9.4%, giving year-on-year growth of over 9% for the eighth straight quarter. Industrial output during the 1h05 was up by 16.4% while retail sales grew by 13.2%. Disposable income per capita of China's urban residents reached $650 in the 1h05, growing in line with the economy at 9.5%.
US Crude Stocks Marginally Lower
US Department of Energy data released Wednesday showed crude oil stocks were down only marginally last week, by 0.9m bbl at 320.1m bbl. Crude imports recovered in the wake of Hurricane Dennis, climbing 0.9mb/d at 10.8 mb/d. Gasoline inventories dipped 1.3m bbl to 211.3m bbl and imports were down 144kb/d at 0.8m b/d but distillate inventories were up 2.3m bbl at 122.7m bbl.
Chinese Dry Bulk Demand Rises by 24% in the 1h05
China's major dry bulk imports totalled 30.3 Mt in June, up by 29% year-on-year. That puts the 1h05 total at 173.7 Mt compared to 139.6 Mt in the 1h04. Iron ore was responsible for most of the growth, with the 1h05 up by 33.5 Mt YOY to 131.2 Mt. Increases in imports of coal (up 4.4 Mt to 12.1 Mt) and grain (up 3.3 Mt to 16.4 Mt) during the 1h05 were almost offset by lower steel imports, which totalled 14.0 Mt compared to 21.2 Mt in the 1h04.
Chinese Oil Product Imports Rebound In June
China's oil product imports rebounded month-on-month in June by 54.9% at 722kb/d, but year-on-year they were down 23%, according to the latest Chinese Customs Data. Fuel oil accounted for much of the rise, climbing 61% from May at 624kb/d, although it was down 19% on a year ago. There was also a rise in kerosene imports month-on-month of 31% at 59kb/d, although again they were down 7.8% on last year. Diesel imports were unchanged from May and 89% lower compared with June 2004.
Mexican Oil Output Cut Due To Hurricane
Nearly 500kb/d of Mexican oil output has been shut in as 63 oil wells in the Gulf of Mexico were closed and staff were evacuated as Hurricane Emily hit the countrys Yucatan Peninsula, according to news
reports. The region produces 80% of Mexicos 3.44m b/d of crude output and any storm-related damage to oil installations could affect crude
supply to the US. Mexico is one of the four biggest suppliers to the US and its exports to the country averaged 1.6mb/d over the first four months of 2005 - approximately 16% of total American crude imports.
Crude Steel Output Slips in June
World crude steel production slipped back to 89.7 Mt in June from a record-breaking 94.8 Mt in May, according to the International Iron and Steel Institute. There was a marked difference in steel production trends between the Atlantic and Far Eastern markets.
Whereas the EU (-6.9% to 15.5 Mt), FSU (-12% to 8.1 Mt), US (-11.3% to 7.3 Mt) and even Latin America (-3.1% to 3.6 Mt) all recorded substantial year-on-year production declines in June, output in the Far East was up by almost 20% on June 2004 levels. The Asian number was led by further big increases in China (+33% to 28.5 Mt) and India (+13% to 3.0 Mt), but more modest growth was also achieved in Japan, South Korea and Taiwan.
Upbeat Outlook for Soya Trade
The US Department of Agriculture have further raised their forecast for world soyabean and meal trade in the 2005-06 (October/September) trade year. The current projection of 113.9 Mt compares with an estimated 108.6 Mt in 2004-05. Of particular note is the expectation for US exports to be maintained at a record 36-37 Mt. This suggests that, as in 2004, there should be a strong seasonal increase in US cargoes from September/October. Last year US soya exports jumped from 2.6 Mt in q3 to 15.7 in q4.
Oil Prices Fall As Storm To Miss US Oil Platforms
Crude oil prices fell as the latest hurricane in the Gulf of Mexico, Emily, is forecast to miss US oil rigs and production platforms, reports Bloomberg. Output is recovering after Hurricane Dennis moved
through the region last week, with the US Mineral Management Service saying the storm made only minimal damage. Currently, output is 15%
below normal compared with 96% on July 10. However, Venezuela suspended oil shipments from Puerto La Cruz and the Jose offshore
terminal as a precaution with Hurricane Emily due to skirt its coastlines.
IEA Revises Down '05 Global Oil Demand Forecast
The International Energy Agency revised down its global oil demand forecast for 2005 in its July report by 200Kb/d to 1.58mb/d making overall demand 83.9mb/d. The revision was due to a weaker outlook for China and the US, the IEA said. It trimmed 100kb/d from Chinese demand growth in 2005 to 360kb/d. The IEA also expects OPEC supply to meet demand later in the year, revising its call on OPEC crude in Q405 to 29mb/d, just below recent OPEC output levels.