North Sea crude exports to rise in November
North Sea Forties crude exports are scheduled to rise 33% month-on-month in November to 360 kb/d as cargoes are delayed from this month’s loading program, reports Bloomberg. Overall North Sea volumes will rise 3% on the month to 860 kb/d. The 200 kb/d Buzzard oil field is set to resume as planned in mid-October.
Richards Bay coal exports
Coal shipments from Richards Bay Coal Terminal fell for a second consecutive month, down 0.6 Mt on August to a 4-month low of 5.2 Mt in September, port authority data indicated. However, this was still 0.3 Mt higher than from a year ago. Total exports in the first three quarters of this year of 49.4 Mt were 5.6 Mt higher than the corresponding period in 2011.
Cosmo to restart first of two CDUs at Chiba in December at earliest
Japanese refiner, Cosmo Oil, could restart one of two CDUs at its 220 kb/d Chiba refinery in December, according to industry sources cited by Reuters. Any such restart would need to be approved by local authorities. Cosmo itself has not issued an official schedule for restart, but is hoping to do so on 1 November. Crude processing at the firm’s Chiba plant has been halted since May, with a restart delayed by an asphalt leak discovered at the end of June.
Port Hedland iron ore exports slip
Iron ore shipments from Port Hedland in September declined by 2.9 Mt from the monthly record in August to 19.9 Mt, according to latest data from the port authority. This was also down 0.1 Mt from the year-ago level. Port Hedland exported 182.5 Mt of iron ore in the first three quarters of the year, up 26.1 Mt from the corresponding period in 2011.
Strong European buying lifts transatlantic diesel flows
US Gulf loadings of diesel and heating oil will exceed 1.9 MB in early October with volumes heading predominantly to Europe, Latin America and the Caribbean, according to Argus. Refinery maintenance has led to particularly strong European buying amidst an open transatlantic diesel arbitrage. The Rotterdam - USG ULSD spread reached its widest for 16 weeks during the week ending 21 September.
Australian iron ore exports at new record
According to the Australian Bureau of Statistics, the country’s iron ore exports (wet basis) in August were up 3% on July and 8% year-on-year to a new record volume of 46.0 Mt. This is also 0.8 Mt higher than the previous peak in December 2011. Total exports in the first eight months of this year totalled 333.4 Mt, up by 43.1 Mt year-on-year. Year-to-date shipments to China of 237.1 Mt were almost 40.0 Mt above last year’s corresponding level.
Petit-Couronne decision deferred again.
A French court has once more postponed its decision over the future of the 162 kb/d Petit Couronne refinery, this time from 2 to 16 October, whilst it waits for more information, Reuters reports. A decision was initially expected in September. The court is set to decide on whether to accept a takeover bid or close the plant. A supply deal with Shell will expire in mid-November at the latest.
Brazilian iron ore exports down YoY in September
September saw Brazilian iron ore exports reach a year-to-date high of 27.7 Mt, according to data from the country’s trade ministry. However, this is still 2.4 Mt lower than the year-ago level. Brazil exported 229.1 Mt of iron ore in the first three quarters of this year, down from the 237.3 Mt moved in the corresponding period last year.
Healthy global demand for October-loading West African crude
Chinese loadings of West African crude are scheduled to hit a five-month high of close to 1 mb/d in October, according to data cited by Argus. Overall shipments of West African crude to Asia are set to remain stable versus September, however, as lower Indonesian purchases offset the increased Chinese buying. Despite heavy refinery maintenance this month, European buying of West African crude is reported as strong, with the region’s refiners turning to Nigerian grades as a replacement for North Sea crude, output of which is currently reduced as a result of maintenance. The end of maintenance at the Buzzard field, the largest contributor to the Forties grade, has been delayed by ten days to 14 October, forcing the deferral of a number of October loading cargoes. Meanwhile, the restart of the Trainer refinery on the US Atlantic Coast is boosting shipments of West African crude into the region. The refinery took around 130 kb/d of West African crude prior to its closure last year. Demand from the US Gulf is also strengthening, as increased US Atlantic and West Coast buying of domestic grades has lifted Louisiana Light Sweet (LLS) values and made seaborne imports into the USG more attractive. The extra flows of West African crude around the globe this month are a positive development for the crude tanker market, particularly the VLCC and Suezmax sector.
China’s PMI Shows Contraction
The latest official Purchasing Managers Index from China’s National Bureau of Statistics shows the country’s manufacturing activity in September contracted for the second consecutive month. September’s reading of 49.8 compared with 49.2 in August. A reading below 50 indicates a contraction in activity.
Wire Rod Price in China
The price of Chinese wire rod at the end of last week was $568/t, according to World Steel Dynamics. This represents little change from the previous week and is $47/t higher than the 34-month low recorded three weeks ago.
Japanese crude steel demand in the 4q12
Demand for crude steel in Japan is expected to be down by a marginal 0.2% year-on-year to 26.5 Mt for the October-December period, according to the country’s trade ministry, as demand has been hit by a decline in car production after government subsidies ended. The country’s steel export growth is also expected to see declines due to the global economic slowdown and oversupply in the Asian steel market.
PDVSA/Reliance deal to further boost Indian imports of Venezuelan crude
A new 15-year supply deal agreed this week between Venezuelan state oil company, PDVSA, and private Indian refiner, Reliance, will see the firm’s imports of the Latin American country’s crude rise from around 270 kb/d currently, to between 300-400 kb/d, Reuters reports. Reliance will also involve itself in developing production from new fields in the Orinoco extra-heavy crude belt. The deal reflects both Venezuela’s intention to expand its crude oil customer base beyond the Americas, particularly the US, as well as Asian refiners desire to diversify its sources of crude oil beyond the Middle East Gulf. When announcing the deal, Venezuela’s oil minister, Rafael Ramirez, stated that PDVSA’s current target of sending 800 kb/d of its crude to Asia was close to being reached.
Japanese coal imports
According to trade data from Japan’s Ministry of Finance, the country imported 6.7 Mt of coking coal (+11% year-on-year) and 9.0 Mt of steam coal (-10% year-on-year) in August. Although Australia remains the primary source of both coking (3.2 Mt) and steam coal (6.3 Mt), other sources increased their share of Japan’s imports. Coking coal imports from Indonesia rose by 60% year-on-year to 1.9 Mt, the highest monthly level since January 2010, while long-haul shipments of coking coal from the US also rose 28% from last year to a 9-month high of 0.6 Mt. Steam coal imports from Russia increased by 21% year-on-year to the highest level since October 2011, at 0.9 Mt.
World HRB price at 33-month low
The latest SteelBenchmarker from World Steel Dynamics shows 6% gain in the Chinese Hot Rolled Band (HRB) price to a 6-week high of $475/t. Elsewhere the HRB price in EU rose 4% during the same period to a 3-month high of $625/t and the US price declined 5% to a 2-month low of $692/t. As result, the World HRB export price fell 4% to a 33-month low of $542/t.
Meanwhile, preliminary data from the US Census Bureau indicate that the country’s steel imports fell for a fourth consecutive month to a year-to-date low of 2.2 Mt in August, down 11% from July. August’s total was virtually unchanged from the year-ago level. Total imports in the first eight months of this year of 20.8 Mt were still 2.9 Mt higher than those for the corresponding period last year.
Mexican crude exports rise in August as shipments to Asia surge
Mexico exported 1.35 mb/d of crude oil in August, a 224 kb/d rise from shipments in July, according to the latest data from state oil firm, Pemex. Shipments to Asia rose from zero in July to 155 kb/d last month, reflecting increased demand from the region’s refiners for heavy crude from outside the Middle East Gulf. Long-haul voyages such as those required to export Mexico’s crude to Asia provide extra tonne-miles for larger crude tankers. Overall Mexican crude exports were 92 kb/d lower yoy. August 2011 saw a similar month-on-month jump in exports to that witnessed last month, although this was led by a 190 kb/d rise in shipments to the US, whilst exports to Asia remained relatively stable.
New Iron Ore Export Restrictions In India
Indian media sources report that exports of iron ore from “captive” Indian mines (owned by domestic steelmakers) is to be banned with immediate effect. Previously, it was usual that iron ore lump from such mines had been consumed by steelmakers, whereas fines had been exported, according to reports. The latest restrictions on exports have been imposed at a time when iron ore shipments from India have been in significant decline. Latest Chinese import data show shipments from India in August dropped to just 1.6 Mt as opposed to 4.3 Mt in the same month last year.
Indian crude runs rise 8.4% yoy in August
Indian crude runs averaged 3.60 mb/d in July, up by 279 kb/d from the same month in 2011, according to the latest data from the Ministry of Petroleum and Natural Gas. August was the fourth consecutive month to witness year on year growth in Indian crude processing, following capacity expansion, most notably at Essar’s Vadinar plant which now has a nameplate capacity of 400 kb/d. Crude runs here were around 104 kb/d higher yoy in August. Government data does not include inputs at Reliance’s second, 580 kb/d, export-based refinery at Jamnagar. Indian oil demand was seen rising by 7.8% yoy last month, according to Reuters.
European Commission biofuel proposals could lift diesel imports
The European Commission is considering reducing its limit to the amount of biofuels made from food crops used in transport fuels by 2020 from 10% to 5%, Energy Intelligence reports. Production of advanced biofuels, which are not made from food crops, is not expected to be anywhere near sufficient to meet the Renewable Energy Directive 2020 10% target for the proportion of transport fuels derived from biofuels. This could boost European imports of diesel from refiners outside of the region, particularly if regional refinery rationalisation continues
Saudi Arabia crude burn hit new peak in summer months
Saudi Arabia burned 744 kb/d of its crude oil for power generation purposes in June and July, an all-time high and up by 82 kb/d from the same months in 2011, Reuters reports. Prior to the summer, the country’s oil minister had stated that increased gas use would limit the volume of crude burned at power stations, but lower than expected gas availability scuppered these plans. Domestic direct burn demand diverts Saudi crude output away from the export market, potentially reducing VLCC supply during the summer.
Global crude steel output at 6-month low
World crude steel production in August was 123.7 Mt, down 3.9% month-on-month and 1.0 % year-on-year, according to latest data from the World Steel Association. This marks the lowest monthly production since February and brings global output in the first eight months of this year to 1,023.2 Mt, up 1.3 % on the corresponding 2011 level.
Output in the EU-27 fell for a third consecutive month to a –month low of 12.2 Mt in August. Annual declines have been also seen in China (-1.7% to 58.7 Mt) and the FSU (-3.8% to 9.1 Mt). However, August did see some year-on-year increases in steel production from other countries, for example Japan (+3.3% to 9.2 Mt), the US (+1.2% to 7.5 Mt), India (+2.6% to 6.4 Mt) and South Korea (+2.8% to 5.7 Mt).
US Weekly Data: Imports and stocks recover post-Isaac
The latest data from the EIA show that US commercial crude stocks rose by 8.5 MB last week to 367.6 MB as imports recovered at a quicker pace than refinery runs following Hurricane Isaac. US crude imports rose by 1.28 mb/d from the week before to 9.85 mb/d, the highest weekly average since the first week of 2012, as cargoes delayed by Isaac arrived into the US Gulf. There was also a dramatic increase in US East Coast imports which rose by 526 kb/d to 1.38 mb/d, perhaps in anticipation of the restart of the 185 kb/d Trainer, PA refinery. A 3.1 MB (28%) increase in East Coast crude inventories to 14.1 MB would support such a hypothesis. A number of refineries in the US Gulf remained affected following Isaac, with US crude runs rising by 595 kb/d to 14.92 mb/d, significantly below the 15.38 mb/d processed in the week before Isaac hit. Overall refinery utilisation rose from 84.7% to 88.9% of total capacity last week. Gasoline stocks fell by 1.4 MB to 196.3 MB, the eight consecutive weekly fall. Demand was largely stable, whilst imports fell by 341 kb/d to 458 kb/d. Distillate inventories declined by 0.3 MB to 128.2 MB, a level 16.3% below the five-year average for the week. Demand recovered from last week’s low reading, with distillate supplied rising by 416 kb/d to 3.69 mb/d. Nonetheless, the 13-week average for distillate supplied was 4.4% lower year-on-year.
South Korean iron ore imports at year-to-date low
Iron ore imports into South Korea in July fell below 5.0 Mt for the first time since December 2011, slipping by 1.0 Mt from May’s year-to-date high to 4.9 Mt, trade data show. As a result, total imports in the first seven months of the year of 38.4 Mt are only 0.6 Mt higher than the year-ago level.
Colombian coal exports at 18-month low
Colombia’s coal exports in August fell 20% month-on-month to 5.0 Mt, representing the lowest monthly level since February 2011, trade statistics show. Shipments to Europe (3.9 Mt) and the Americas (1.1 Mt) both declined by 0.5 Mt from July, while there were no shipments to Asia for the first time since January.
CDU restart imminent at Trainer refinery, FCC restart delayed
Monroe Energy, a subsidiary of Delta Airlines, is close to restarting a CDU at its 185 kb/d Trainer, PA refinery on the US Atlantic Coast (USAC), Reuters reports. A sulphur recovery unit is also being prepared to recommence operations, but a restart of the plant’s fluid catalytic cracker (FCC) will be delayed for at least a week following the discovery of complications during a recent turnaround. Monroe purchased the plant from ConocoPhillips after it was shutdown in September last year in the face of weak margins. Monroe has subjected Trainer to a major turnaround, beginning in early July, in order to increase the refinery’s jet fuel yield, suiting its airline parent company’s needs. Under a deal with Phillips 66 and BP, other products from the plant will be swapped for jet fuel from other US refineries. The restart is potentially a positive development for the Atlantic crude tanker market, as USAC crude imports may increase. This upside may be limited by increased rail supply of domestic crude to the refinery. The Trainer restart, as well as a deal to save the 335 kb/d Philadelphia refinery, have undermined a positive outlook for the transatlantic MR market that was envisaged when it looked likely that the two plants would close as part of wider USAC refinery rationalisation. Seaborne product imports into the region were expected to increase to make up a shortfall exacerbated by the possible closures. An expansion of the Colonial distillate pipeline from the USG to the USAC as well as higher coastal shipments has also limited the need for increased overseas imports into the region.