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Saudi state oil company, Saudi Aramco, has released its official selling prices (OSPs) for its August loading crude oil. Prices for lighter grades will be lowered for both US and Asian buyers. Next month, Arab Super Light will be sold to the Asian market at a $3.85/bbl premium to the Dubai/Oman average, $1.00/bbl less than during this month, whilst Arab Extra Light will attract a $2.95/bbl premium ($0.50/bbl less than July) and Arab Light a $1.35/bbl premium ($0.10/bbl less). US buyers will see Extra Light prices reduced to a $2.25/bbl premium ($0.65/bbl lower) to the Argus Sour Crude Index (ASCI), whilst Arab Light will command a $0.10/bbl premium ($0.15/bbl lower). The lower prices for lighter grades come after the IEA sanctioned a release of emergency stockpiles, reducing the tightness of the global light crude markets. Meanwhile heavier grades, Arab Medium and Arab heavy, will have their OSPs for the two markets increased next month. Elsewhere, buyers in NW Europe will see discounts increased for all Saudi grades versus Brent in August, but Mediterranean refiners face increased prices across the board.

Iron ore shipments from Port Hedland in June rose 2% month-on-month and 22% year-on-year to 18.6 Mt, port authority data show. This represents a record monthly throughput. Shipments to China rose 11% on May to a new high of 13.9 Mt. By contrast, exports to Japan and South Korea both fell in June to 1.7 Mt and 1.9 Mt respectively.

Australian coal exports in May of 21.6 Mt were down marginally (1.5%) on April and 14% lower year-on-year, but still up 17% from the recent low in February, according to the Australian Bureau of Statistics. May shipments of coking coal from Australia registered a 29% year-on-year decline to 10.3 Mt, while exports of steam coal rose 8% year-on-year to 11.3 Mt. This took exports in the first five month of this year to 101.2 Mt, 15.5 Mt or 13.2% lower than the corresponding period last year. Latest data from port authorities do, however, show a 3 Mt month-on-month increase in the combined June shipments from the Carrington, Korragang, Gladstone and Dalrymple coal terminals.

Exports of crude oil from the Former Soviet Union averaged 6.38 mb/d during May, a 532 kb/d fall from April, Argus reports. The decline came after an increase in export duty came into force at the start of May. Shipments from Baltic Sea ports fell by 194 kb/d, to 1.50 mb/d, whilst loadings from the Pacific port of Kozmino slipped 11 kb/d lower, to 308 kb/d. Despite the overall decline, exports from Black Sea ports managed a 63 kb/d increase, rising to 953 kb/d. Shipments along the CPC pipeline were 76 kb/d lower, at 629 kb/d, with BTC Blend exports from Ceyhan dropping by 94 kb/d, to 697 kb/d.

Australian iron ore exports in May rose to a year-to-date high of 39.1 Mt (wet basis), with increases of 11% on April and 15% year-on-year, according to the Australian Bureau of Statistics. This was just short of last December's monthly record of 39.6 Mt. Most of the monthly increase came from Asian buyers (except Japan). Combined shipments to China, South Korea and Taiwan rose to an all-time high of 32.9 Mt in May, marking a strong rebound of 48% or 10.7 Mt from the recent low in February. However, trade data show a further decline in exports to Japan after the March earthquake to a 3-month low of 6.2 Mt in May.

Last week saw India raise domestic diesel prices by $10.70/bbl, the first price hike in more than a year, Argus reports. Kerosene and LPG prices were also increased. At the same time, the existing 5% duty on crude oil imports was scrapped, whilst diesel and mogas import duties were reduced from 7.5%, to 2.5%.

The US Department of Energy has revealed the details of the successful bidders in the recent round of strategic stock release tenders, noting that the process was “substantially oversubscribed”, J.P Morgan and Argus report. Fifteen companies had bids accepted for a total of 30.64 MB of crude oil, with Valero, Vitol and Shell making the largest purchases. Over half of the volumes to be released have been purchased by refiners operating in the USG.

Latest data from the Japan Iron and Steel Federation indicate a further decline in the country’s steel exports in the aftermath of the March earthquake. Japan’s steel exports in May fell for the second consecutive month, down by 8% decline year-on-year and 3% month-on-month to 3.3 Mt, which represents the lowest monthly level since November 2009. Exports in the first five months of this year were virtually unchanged from last year, at 18.0 Mt. By contrast, steel imports in the same month rose to a year-to-date high of 0.7 Mt, up 10% month-on-month and 16% year-on-year. Total imports in Jan-May of this year were 3.3 Mt, 18% higher than the corresponding period last year.

According to the latest government data, Japanese crude imports dropped to 3.08 mb/d during May, down 11% yoy, and 14% lower than during April. May’s decline represents the fifth consecutive monthly fall. Saudi Arabia remained the country’s lead supplier, providing 1.03 mb/d in May, the same volume shipped a year earlier. Amongst other leading suppliers, Qatar, Iran and Russia all saw significant yoy declines in their exports to Japan. Shipments from Indonesia bucked the trend, rising by 52% yoy, to 114 kb/d, reflecting increased demand for the country’s sweet crudes for direct-burn power generation in the aftermath of March’s earthquake.

The International Grains Council has increased its projection for the world wheat trade in 2011/12 (July-June), due to larger-than-expected purchases in Near East Asia, Pacific Asia and the EU. The IGC expects global wheat trade to reach 126.4 Mt, up 4.5 Mt from last year’s trade estimate, but down 1.5 Mt from the previous 11/12 forecast. Annual increases in exports are supported by a sharp rebound in exports from Russia and Ukraine (+12.4 Mt to 20 Mt). However, the total forecast export volume from the five major exporters (particularly the US & EU) has declined to 88.6 Mt for this marketing year from 97.7 Mt a year earlier. Meanwhile, the forecast for world soyabean exports during 2011/12 (Oct-Sep) has been revised 2.1 Mt higher from last month to 98.3 Mt.

Japanese domestic steel demand in the 3q11 is forecast to grow 8.1% from the estimated 2q level to 14.9 Mt, according to the Ministry of Economy, Trade and Industry (MITI). This is primarily due to rebounding activity in the car industry, but will not prevent a 5.65 year-on-year fall in domestic steel consumption. By contrast, the government predicts that the country’s steel product exports will show positive quarter-on-quarter (5.4%) and year-on-year (2%) growth to 8.7 Mt in the 3q11. However, the benefits for Japan’s crude steel production are expected to be diluted by high existing inventories with a 1.5% quarter-on-quarter increase in output forecast by MITI to 26.9 Mt

Crude runs at Indian refineries averaged 3.40 mb/d during May, compared with 3.42 mb/d in April, and 3.25 mb/d a year earlier. The government data does not include processing at either Reliance’s second, 580 kb/d, export-based Jamnagar refinery, or BPCL’s 120 kb/d Bina plant, which commenced operations in April.

According to Transneft loading schedules, Russian seaborne crude exports will average 2.58 mb/d next month, down 51 kb/d from June’s scheduled shipments and 264 kb/d lower year on year. Baltic exports are set to drop 117 kb/d mom, and 118 kb/d yoy, to 1.30 mb/d, whilst Black Sea loadings are planned at 969 kb/d, down 134 kb/d yoy, but up 76 kb/d from this month. Shipments from the Pacific port of Kozmino are set to remain fairly stable, dropping just 10 kb/d from June, and 12 kb/d yoy, to 307 kb/d.

China will remove import duty from diesel and jet fuel from Friday, in a bid to encourage shipments from abroad and avoid potential shortages, Reuters reports. Some analysts have predicted this could turn China into a net-importer of diesel next month, although warn that, at current prices, refiners may be reluctant to take volumes that would still incur losses when sold domestically.

According to the latest data from the EIA, U.S. crude inventories dropped by 4.4 MB last week, to 359.5 MB. Imports were 271 kb/d lower than the week before, at 8.88 mb/d, and were 603 kb/d (6.4%) down from the equivalent week in 2010. Crude throughputs at U.S. refineries were fairly stable, dropping just 31 kb/d, to 15.25 mb/d. Overall refinery utilisation stood at 88.1% of total capacity, down from 89.2% a week earlier. Meanwhile, mogas inventories fell by 1.4 MB, to 213.2 MB, and ended the week 4.9 MB (2.2%) lower yoy. Imports of the product fell for the fifth consecutive week, down by 184 kb/d, to 683 kb/d. Distillate inventories rose by 0.3 MB, to 142.3 MB, whilst imports declined by 42 kb/d, to 80 kb/d. Today sees bidding close on the 30 MB of crude oil being made available from US strategic reserves, as part of the IEA’s collective action announced last Thursday.

World Steel Dynamics’ SteelBenchmarker puts world export prices for hot rolled band at $718/t at end-June, the lowest point over the past five months and down $55/t or 7% on the year-to-date peak at end-February. HRB steel prices lost momentum in all regions. China’s HRB price fell to a 3-month low of $620/t, down $14/t or 2% from one month ago. The US prices fell for the third consecutive month to $834/t, down $43/t or 5% from end-May. In the EU, the HRB price was $798/t, with a decline of $17 or 2% month-on-month.

The International Energy Agency (IEA) has released details of individual countries’ contribution to the recently announced 60.6 MB (2.0 mb/d) emergency stock release. The U.S.A. is the largest individual contributor, making available 30 MB (1.5 mb/d) of crude oil. Pacific members, Japan and Korea, will offer a combined 11.4 MB (380 kb/d), of which 7.4 MB (247 kb/d) will be crude, and 4.0 MB (132 kb/d) will be product. Nine European members will contribute 19.2 MB (641 kb/d), 4.2 MB (139 kb/d) in crude, and 15.1 MB (502 kb/d) in product. Overall, 38.9 MB (1.3 mb/d) of the crude and product made available will come from publicly held inventories, with 21.7 MB (723 kb/d) released from industry stocks.

According to data from the China Iron & Steel Association quoted by Reuters, national daily crude steel production in the second ten days of June edged lower to 1.96 Mt, down 0.7% from the first ten days of June. However, daily average output has accelerated to above 1.9 Mt since February, compared with an average of 1.7 Mt last year.

Eastbound shipments of West African crude will average 1.38 mb/d in July, down 140kb/d from already depressed levels in June, Argus reports. High premiums to Middle East grades are deterring Chinese refiners, who are set to take 735 kb/d of West African crude next month, down almost 340 kb/d from the same month in 2010, although up slightly from June. A wide spread between Atlantic basin and Middle East benchmarks, Brent and Dubai, has led Chinese buyers to increase their purchases of Saudi crude, at the expense of Angolan grades. Angolan crude made up 12% of China’s imports between January and April, down 19% yoy, whereas Saudi grades constituted 19% China’s purchases, up from 17% a year earlier. Indian demand for West African grades in July has also been sluggish, as weak mogas refining margins have deterred buyers from taking light-sweet Nigerian grades. A period of heavy maintenance at IOC’s refineries has also taken its toll.

The price of Chinese wire rod continued to fall last week, down $22/t from one month ago to an 11-week low of $724/t on June 24, according to World Steel Dynamics. However, the current price marks a gain of $142/t from the year-ago level.

The latest data from KNOC reveals that South Korean crude imports averaged 2.33 mb/d in May, down 5% from the 2.45 mb/d imported during the same month in 2010. Meanwhile, the country exported 1.14 mb/d of petroleum products, up 28% yoy. Crude runs at South Korean refineries last month increased by 9.6% yoy, to 2.49 mb/d.

Trade data show a strong rebound in coal imports from all sources into China in May. Shipments from China’s largest supplier Indonesia rose to its second highest level of this year, with a massive 81% increase month-on-month to 5.6 Mt. Imports from Australia rose for the second consecutive month by 25% on April to 1.2 Mt. However, the volume from Australia last month is still 50% lower than the year-ago level. There were gains in long-haul imports: South Africa (+19% MoM to 0.4 Mt) and the USA (+32% MoM to 0.5 Mt). However, there were no shipments from Colombia in May, unlike May 2010 when 0.5 Mt were imported.

At a press conference in Paris this afternoon, the International Energy Agency announced an agreement between its 28 member states to release 2 mb/d from emergency stockpiles over a period of 30 days, which will begin to arrive in the market around the end of next week. The move comes in response to the disruption of Libyan supplies, and in anticipation of a shortfall during the summer period of peak demand. The agency expressed its concern that further rises in the price of oil could ‘undermine the fragile global economic recovery’. The IEA described its ‘close consultation with major producing countries’ prior to today’s announcement, and cited the delay in increased output hitting the market as another reason behind the decision to release stocks. The agency intends to reassess the oil market, and its response, in 30 days’ time. The stock-release will be only the third since the founding of the IEA in 1974, the previous two coming in response to Hurricane Katrina in 2005, and the Iraqi invasion of Kuwait in 1990/91.

According to the latest data from the EIA, crude throughputs at US refineries rose by 409 kb/d last week, to 15.28 mb/d and the highest level since the last week of July 2010. This helped take overall refinery utilisation to 89.2% of total capacity, up from 86.1% the week before. Crude inventories dropped 1.7 mb/d, to 363.8 MB, whilst imports rose by 511 kb/d, to 9.15 mb/d. Meanwhile, mogas stocks fell for the first time in seven weeks, dropping by 500 KB, to 214.6 MB. Imports of the product slowed by 248 kb/d, to 867 kb/d. Distillate inventories rose by 1.2 MB, to 142.0 MB, with imports stable at 122 kb/d, down just 3 kb/d from the week before.

Iron ore shipments from Australia to China rebounded to a 4-month high of 22.3 Mt in May. Imports from Brazil also showed a gain of 1.2 Mt from a 10-month low in April to 10.9 Mt. China imported 6.8 Mt of Indian iron ore in May, posting the lowest level since November 2010 and down 35% year-on-year. Total imports in the first five months of this year from these three sources were virtually unchanged from the year-ago level, at 214 Mt. By contrast, shipments from the rest of the world in the same period saw a massive 22.4 Mt or 47% increase year-on-year to 69.8 Mt.