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Russian product exports are expected to fall in September and October due to a large number of refineries undertaking maintenance, reports Argus. Fuel oil exports are likely to drop as work is done on CDU’s. Meanwhile, maintenance at several hydrotreaters will result in them producing gasoil that fails to meet Russian diesel quality regulations which is then likely to be exported. Repairs to catalytic cracking units may result in higher VGO output, while naphtha production is expected to rise due to work on several catalytic reforming units. In addition, Transneft will repair the Samara-Tikhoretsk crude pipeline in September, which will undermine supplies to refineries located in southern Russia.

China produced 58.7 Mt of crude steel in August, down 5% on July to the lowest level since February, according to data from the National Bureau of Statistics. August’s figure remained flat from a year ago. However, total output in the first eight months of the year of 476.6 Mt was almost 10.0 Mt higher than the corresponding period last year.

China’s crude imports fell 15.7% month-on-month and 12.5% year-on-year in August to 4.35 mb/d, the lowest volume since October 2010, amid weak demand and refinery maintenance, according to the latest figures from China Customs. Downstream demand in the country has been weak, and refiners’ margins, which were already negative, worsened in August due to higher global crude oil prices, prompting them to cut operating rates. State-owned refineries operated at around 68% of capacity in August compared with a 2012 average of 78%, reports Reuters. Previous months had also seen China fill up most of its commercial crude storages. As of end-July they held 32.36MT, or 236MB.

Preliminary trade data indicates that China imported 62.5 Mt of iron ore in August, up 8% month-on-month and 6% year-on-year to a 3-month high. This took total imports in the January to August period to 487.3 Mt, some 40.0 Mt higher than from the corresponding period last year.

Coal shipments from Richards Bay Coal Terminal slipped 0.4 Mt from the year-to-date high in July to 5.9 Mt in August, port authority data indicated. This also marked a 1.1 Mt decline from a year ago. However, total exports in the first eight months of this year of 44.2 Mt were 5.4 Mt higher than the corresponding period in 2011.

Iron ore traffic moving through India’s major ports in August rebounded 2.6 Mt month-on-month to a 3-month high of 4.9 Mt, according to the Indian Ports Association. However, total throughput in January to August of this year of 32.9 Mt was still represented a massive decline of 22Mt year-on-year.

Latest data from the EIA show that US commercial crude inventories fell by 7.4 MB last week, as Hurricane Isaac disrupted imports into the US Gulf. US crude imports fell by 1.46 mb/d from a week earlier to 8.04 mb/d. Refinery operations were also disrupted, with US crude runs falling by 772 kb/d to 14.61 mb/d. Refinery utilisation fell from 91.2% to 86.1% of total capacity. Disruption to refinery and field production from Isaac has been relatively short-lived, suggesting that a need for a subsequent dramatic increase in US crude and product imports, like that seen after previous hurricanes, is unlikely to emerge.

Iron ore shipments from Port Hedland in August rose by 3.3 Mt on July to a new monthly record of 22.8 Mt, according to latest data from the port authority. August’s figure was also 2.6 Mt higher than the year-ago level and 0.3 Mt higher than the previous peak in May. Port Hedland exported 162.6 Mt of iron ore in the first eight months of the year, up 26.3 Mt from the corresponding period in 2011.

The US Government’s Environmental Protection Agency has waived the need for summer grade gasoline in Louisiana, Mississippi, Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee in an attempt to ease tight gasoline markets following disruption to US Gulf refinery operations as a result of Hurricane Isaac. An easing of the regional gasoline market could reduce US import demand, potentially impacting negatively on the TC2 market. The summer grade season in the US ends on 15 September, at which point gasoline markets may be expected to ease further.

Maintenance at Nexen’s 200 kb/d Buzzard oil field in the North Sea began yesterday (4 September). The work is expected to last for a number of weeks, and will reduce available supply for crude tankers in the region.

Following India’s Supreme Court decision to allow the partial resumption in iron ore mining operations in Karnataka after a more than a year of suspension, India’s Mining Ministry announced that the government may choose to reduce the tax on iron ore exports (and railway freight) in order to help the country’s mining sector, according to various media.

Coal shipments from Gladstone fell for a third consecutive month to 4.5 Mt in August, port authority data indicated. This also marked a 7% decline from a year ago. However, total exports in the first eight months of this year of 37.6 Mt were 7.0 Mt higher than the corresponding period in 2011.

The French courts have postponed a decision concerning the fate of the 162 kb/d Petit Couronne refinery until 2 October, Reuters reports. A decision as to whether to sell or close the plant was initially due today. The refinery has been operating under an agreement with Shell since June, following a shutdown in January in the wake of the Petroplus bankruptcy. The deal with Shell will continue until mid-November at the latest, according to the company. Two bidders have emerged for the plant, but did not have the necessary paperwork in place by today’s deadline. The decision to continue operations at the plant in the short-term avoids adding further tightness to European product markets. A closure may have boosted import demand for product into the region from the US and Asia, benefitting MR and LR product tankers. But further tightening of regional product markets could have sent fuel prices surging, potentially resulting in significant end-user demand destruction. The French government, in association with the country’s oil industry, has already implemented fuel price cuts for three months in an attempt to prevent such a scenario emerging.

Data from the trade ministry show that Brazilian iron ore exports remained steady in August, up marginally by 0.2 Mt on July to 27.5 Mt. However, August’s figure is still 5.0 Mt lower than the record volume of 32.5 Mt in August 2011. In the first eight months of this year, Brazil exported a total of 201.4 Mt of iron ore, compared with 207.2 Mt in the corresponding period in 2011.

Valero will convert its shuttered 235 kb/d Aruba refinery in the Caribbean to a product storage terminal by the end of this year, Reuters reports. Operations at the plant were halted in March this year in the face of weak margins. Valero will continue to seek a buyer for the facility. Reports of a $350m bid from PetroChina for the site emerged in May, but no deal has been reached as of yet.

Coal exports from the Carrington and Kooragang terminals at Newcastle slipped 1.7 Mt month-on-month to 8.3 Mt in August, the lowest monthly level since May, according to Port Waratah Coal Services. This was 0.5 Mt lower than the year-ago level. Total shipments in the Jan-Aug period of 69.3 Mt were 5.5 Mt higher than the corresponding period in 2011.

Official data from the National Bureau of Statistics showed a contraction in manufacturing activity in August. China’s Purchasing Managers Index fell for a fourth consecutive month to 49.2 in August, representing the first drop below 50-mark since November 2011.

The price of wire rod in China declined again, falling by $27/t from the beginning of August to $530/t, according to World Steel Dynamics. This marked the lowest level since mid-December 2009.

Russia’s seaborne crude exports are expected to rise 34 kb/d on the month in September to 2.95 mb/d, with volumes from the Baltic set to increase 181 kb/d to 1.93 mb/d, reports EnergyIntel. Shipments from Novorossiysk are set to drop 157 kb/d to 700 kb/d due to poor margins while no cargoes have been allocated to the Tuapse outlet as Rosneft keeps the volumes for the increased capacity at its Tuapse refinery. Volumes of Siberian Light currently exceed Tuapse’s expanded capacity but the current pipeline network to Tuapse is not sufficient to feed both the refinery and exports. Siberian Light exports will be reduced and instead be run at the domestic refinery while the line is expanded. Volumes from Ust-Luga are due to rise 63 kb/d to 426 kb/d after shipments failed to reach the 2Mt per month allocation in July and August due to market conditions.

The head of refining at Petrobras, Brazil’s state oil company, expects the country’s imports of diesel to reach as high as 300 kb/d in 2014, up from around 150 kb/d now, and imports of gasoline to rise from 75 kb/d to 90 kb/d over the same period, Reuters reports. Lengthy delays to refinery projects are ensuring domestic output of transport fuels is not keeping up with rising demand. New refineries at Abreu e Lima and Comperj have suffered multi-year delays, and are not expected online until 2014 and 2015 respectively. When processing starts at these plants, Petrobras expects diesel import requirements to fall back to 100 kb/d. Further rises to product import demand from Brazil and other burgeoning Latin American economies will likely increase employment for MRs out of the USG, exports from which have surged in recent times. Strong export demand is supporting USG product prices, however, limiting transatlantic diesel arbitrage opportunities and potentially partially offsetting this extra MR demand.

India exported 11.9 Mt of iron ore in the first quarter (April-June) of the current financial year (April 2012/March 2013), down 45% year-on-year, according to the Federation of Indian Mineral Industries. The Federation is now estimating Indian iron ore exports to total 45 Mt during the current financial year, down by 72 Mt or 62% from the record volume of 117 Mt in 2010/11 and 17 Mt or 27% lower than the previous financial year’s 62 Mt.

The US economy grew at an annual rate of 1.7% in the 2q12, up from its initial estimate of 1.5%, according to the Commerce Department. However, it is still lower than the 2% growth in the 1q12.

After four consecutive weeks of declines that saw US commercial crude inventories drop by 19.4 MB, stocks rose last week by 3.8 MB to 364.5 MB after crude imports surged. Imports of 9.50 mb/d were 1.29 mb/d higher from a week earlier. Nonetheless, 4-week average imports were 4.8% lower yoy, reflecting the depressed levels prior to last week. Following hurricane disruption this week to USG crude oil production and imports via the LOOP terminal, but less severe interruptions to refinery operations, stocks may well be shown to have declined once more during this week. Crude runs at US refineries averaged 15.38 mb/d last week, down slightly from the 14.44 mb/d processed a week earlier. This and lower imports saw gasoline stocks drop by 1.5 MB to 201.2 MB. Distillate inventories rose by 0.9 MB to 126.1 MB, but remained 16.6% lower than the five-year average.

The world hot rolled bank export prices slipped by $4/t from two weeks ago to $579/t, according to World Steel Dynamics’ SteelBenchmarker. This marked the lowest level since January 2010 and $131/t lower than the year-ago level. The HRB price in China has extended its slump, falling by a further $17/t in the last two weeks to its lowest level since December 2009, at $462/t. However, the HRB price in the US saw a modest gain of $14/t over the same period, standing at a 15-week high of $727/t.

Tropical Storm Isaac is currently bearing down on the US Gulf of Mexico and has caused the closure of some US Gulf refineries and the evacuation of offshore oil rigs. The storm is expected to make landfall late Tuesday into early Wednesday over Louisiana - where a high concentration of US Gulf refineries are located - just south of New Orleans. The National Hurricane Center is projecting that the storm could strengthen into a Category 2 Hurricane. News reports suggest that operations have so far been halted or reduced at refineries with a combined capacity of 2.35 mb/d. The last report from the US Bureau of Safety and Environmental Enforcement on 27 August said personnel had been evacuated from 346 rigs in the US Gulf of Mexico and that 1.08M b/d of oil, accounting for 78% of US Gulf production, has been shut in. Energy Intelligence noted that if a refinery does shutdown, it could take up to 10-14 days to restart. The Louisiana Offshore Oil Port shut operations and suspended the offloading of tankers at 9am CDT on 27 August, Platts reported. Any prolonged outage of Atlantic basin refinery production could see more longer haul product shipments as imbalances in regional supply would need to be addressed, potentially boosting voyages for the MRs and possibly drawing more refined barrels from Asia to head west, that would support LRs. Rates for Aframaxes and Panamaxes in the Caribbean could be boosted by the inevitable delays in being able to discharge cargoes and any repositioning of ships due to Isaac.