News archive April 2009

FSU crude exports to non-CIS countries rose by 560,000 b/d to 6.6 m b/d in the first quarter year-on-year, reports Argus. This was mainly due to higher Caspian crude exports on the back of production increases in Kazakhstan and Azerbaijan. Light sweet BTC Blend and CPC Blend pipeline shipments increased by more than 200,000 b/d in the first quarter. However, March exports fell by 125,000 b/d compared with February, due to lower shipments along the BTC pipeline and Transneft system.

By late afternoon in London, ICE Brent was trading at $ 50.86/bbl.

US steel imports in March were 1.4 Mt, down by 5.3% from the previous month, and the lowest since December 2003, according to the American Iron and Steel Institute (AISI). Imports in the 1q09 totalled 5.0 Mt, representing an annual fall of 29%. The largest volume of finished steel shipments into the US in March was from China.

US crude inventories increased by 4.1 m bbl to 374.7 m bbl last week, and were 17% higher year-on-year, while crude imports fell by 31k b/d to 9.82 m b/d and crude oil production reached 5.27 m b/d, down by 152k b/d, according to the latest data from the US Department of Energy. US gasoline stocks dropped by 4.70 m bbl to 212.6 m bbl, roughly unchanged year-on-year, while refinery utilisation fell by 0.77% to 82.7%. Gasoline imports dropped by 276k b/d to 841k b/d, while demand increased slightly by 15k b/d to 9.15 m b/d and production dropped by 298k b/d to 8.79 m b/d. Distillate stocks rose by 1.79 m bbl to 144.1 m bbl, 36% higher year-on-year, while imports fell by 69 k b/d to 123 k b/d, and production rose slightly by 17k to 4.15 m b/d.

By late afternoon in London, ICE Brent was trading at $ 50.93/bbl.

Weak steel demand around the world has led to a continued slide in international steel prices. According to the World Steel Dynamics’ SteelBenchmarker, the World export price for Hot Rolled Band slipped by $5/t over the last two weeks to $395/t, the lowest level since August 2005. This represents a massive 64.5% fall from the peak of $1,113/t set in July 2008.

Iron ore stockpiles at China’s discharge ports have risen by 10 Mt over the past two months to over 68 Mt at the end of last week - the first time since November 2008. However, this is still lower than the 4q08 peak of 74.4 Mt. Meanwhile, the spot fob price of iron ore from India is around $53/t compared with $73/t in mid-February.

Saudi Aramco will almost double gasoline imports in May, compared with April, to compensate for shortfalls caused by refinery disruptions, reports Argus. The partial shutdown of the 325,000 b/d Ras Tanura refinery caused this unusual request for gasoline imports. Imports will mainly come from Mediterranean and Black Sea refineries. Meanwhile, Mexico's crude output dropped by 225,000 b/d to 790,000 b/d in Q109, mainly due to declines at the Cantarell field.

By late afternoon in London, ICE Brent was trading at $ 49.60/bbl.

The World Steel Association forecasts that world apparent steel use (ASU) will fall 14.9% this year to 1.019 billion tonnes. This represents a sharp slowing from 2008, when deteriorating economic conditions towards the end of the year contributed to an overall annual decline of 1.4%.

The World Steel Association also outlines differing projections for China and the rest of the world. In China, an annual decline of 5.0% in ASU to 404.4 Mt is envisaged this year, while in the world excluding China a substantial year-on-year drop of 20.4% to 614.2 Mt is forecast.

India is the only one of the larger steel producers where positive growth is projected (+1.7%), while big falls are predicted in the US (-36.6%), Japan (-20.4%) and the EU (-28.8%).

China became a net importer of gasoline in March, with net imports at 10,000 b/d, compared with 85,000 b/d net exports in February, reports Argus. New car sales increased by 10% year-on-year in March boosted by lower sales taxes. Chinese net diesel exports fell to 40,000 b/d in March, compared with 55,000 b/d in February. Meanwhile, India has permitted refiner Reliance to sell products to the domestic market from its older 660,000 b/d Jamnagar refinery, as export markets have been hit by lower demand.

By late afternoon in London, ICE Brent was trading at $ 49.90/bbl.

China imported a total of 19.64 Mt of iron ore from Australia during March, down by 2.4% MoM. The second largest supplier was India, with 12.93 Mt of iron ore exports into China, up by 9.3% MoM, while imports from Brazil rose by 21% to 9.84 Mt, according to Umetal.

China's crude imports from Saudi Arabia fell over 27% y-o-y to 589k b/d in March while volumes from Angola were down 37% at 544k b/d in line with OPEC cuts, reports Energy Intelligence. Shipments from the Middle East accounted for 45% of the total 3.86m b/d imported in March while volumes from Africa made up 27%. However, Russian imports rose 23% to 322k b/d. In the Jan-Mar period China's imports fell 9% y-o-y to average 3.33m b/d.

World steel production data for March highlight contrasting production levels in China and the rest of the world.

According to the World Steel Association, global output totalled 91.7 Mt in March, down 23.5% year-on-year. Production in China reached 45.1 Mt (down just 0.3% on March 2008), which represents almost half of world output.

In contrast, production in the rest of the world dropped 38% annually to 46.6 Mt during the same month. Of the major steelmaking centres, annual declines were most pronounced in the US (-52% to 5.6 Mt), Japan (-47% to 5.7 Mt) and the EU (-45% to 10.3 Mt).

The March production totals bring global steel output in the 1q09 to 263.7 Mt, around 4 Mt below the previous quarter and the lowest quarterly total since the 3q04.

Exports from the Caspian Pipeline Consortium (CPC) terminal near Novorossiysk are set to fall about 3% month-on-month in May to 652k b/d, according to preliminary loading schedules, reports Bloomberg. 674k b/d are scheduled to be shipped in April. CPC shipped an average of 673k b/d in 2008.

China’ steel exports fell by 60% year-on-year to 1.67 in March, according to data from China’s General Administration of Customs. China’s steel imports in March hit a 3-year high, up by 13% year-on-year to 1.73 Mt. As a result, China became a marginal net steel importer for the first time since November 2005.

US crude stocks grew another 3.86m bbl to 370.6m bbl, the highest since Sept 1990 and 17% higher y-o-y, after imports rose 464k b/d to 9.86m b/d, according to the latest data from the US Department of Energy. Gasoline inventories increased 0.8m bbl to 217.3m bbl after imports inched 43k b/d higher to 1.12m b/d while demand was up 192k b/d at 9.14m b/d. Distillate stocks grew 2.68m bbl to 142.3m bbl, 36% higher y-o-y as imports rose 48k b/d to 192k b/d and demand dropped 317k b/d to 3.45m b/d.

The International Monetary Fund (IMF) has revised down its projection for world economic growth for 2009 for the fourth time since October. According to the latest update, world economic growth is now forecast to contract by 1.3% in 2009, compared with negative growth between 1% and 0.5% in March’s forecast. Among the advanced economies, the sharpest contractions are predicted for Japan (-6.2%), the EU (-4.2%) and the US (-2.8%).
The IMF also revised its 2009 projection for the Chinese economy from 6.7% growth in its previous forecast, to 6.5%.

World steel production data for March highlight contrasting production levels in China and the rest of the world. According to the World Steel Association, global output totalled 91.7 Mt in March, down 23.5% year-on-year. Production in China reached 45.1 Mt (down just 0.3% on March 2008), which represents almost half of world output. In contrast, production in the rest of the world dropped 38% annually to 46.6 Mt during the same month. Of the major steelmaking centres, annual declines were most pronounced in the US (-52% to 5.6 Mt), Japan (-47% to 5.7 Mt) and the EU (-45% to 10.3 Mt).
The March production totals bring global steel output in the 1q09 to 263.7 Mt, around 4 Mt below the previous quarter and the lowest quarterly total since the 3q04.

The Energy Intelligence Administration has forecast US gasoline consumption to rise 90k b/d y-o-y to 9.1m b/d in the peak summer driving season (2Q and 3Q09), reports Petroleum Argus. However, overall US product demand this year is still expected to fall by over 425k b/d to just under 19m b/d as economic weakness offsets the effects of lower prices. Domestic gasoline production is expected to rise by about 240k b/d for the summer y-o-y as refiners shift away from distillate production and maximise gasoline output, thus imports are set to drop 80k b/d on the year to 900k b/d.

According to customs statistics, US steam coal imports decreased by 22% from the previous month to 1.61 Mt in February, falling to the lowest monthly level since March 2004, down by 50% compared with a record monthly high of 3.21 Mt set in August 2007, McCloskey reports.

Russian refinery maintenance will cut crude runs by at least 420k b/d in April-May and secondary unit throughputs by at least 170k b/d, reports Petroleum Argus. Fuel oil exports through the Black Sea ports of Odessa and Sevastopol will be halved to 55k b/d this month due to work at two Rosneft units, with a combined capacity of 330k b/d. Maintenance at another two plants with combined capacity of 720k b/d will cut fuel oil exports through the Baltic port of Tallinn by 20k b/d. Lukoil will also be halting diesel exports from its 365k b/d refinery through Primorsk.

Saudi Arabia's exports to the US fell 200k b/d month-on-month in February to 1.12m b/d, the lowest since June 1996, as OPEC cut output to offset falling demand and lower high commercial crude inventories, reports Energy Intelligence. The low volume was 380k b/d below the 2008 average of 1.5m b/d and puts Saudi behind Canada and Mexico in terms of crude shipped to the US in February. Overall, US crude imports in February fell 650k b/d month-on-month to 9.19m b/d, with shipments from Venezuela and Algeria decreasing 210k b/d and 215k b/d respectively on the month, however, Angola sent 150k b/d more.

FSU seaborne crude oil exports dropped by 68,000 b/d month-on-month in March, partly due to disruptions to shipments from the Black Sea and a slight rise in Russian export duties, Energy Intelligence reports. Total seaborne crude exports reached 2.407 m b/d, compared with 2.475 m b/d in February. Shipments through Novorossiysk fell by 28,000 b/d month-on-month to 618,000 b/d, having dropped by 84,000 b/d versus March 2008, after a fire on the Transneft pipelines feeding the port disrupted transhipments in early March.

By late afternoon in London, ICE Brent was trading at $ 53.20/bbl.

According to data from China’s General Administration of Customs, China’s coal imports in March increased for the fourth consecutive month. China imported 5.72 Mt of coal in March, representing a 17.2% increase from February and a 37.4% rise year-on-year. This puts China’s coal imports at 13.59 Mt in the first quarter of the year, up by 21% from a year earlier.

US crude inventories increased by 5.7 m bbl to 366.7 m bbl last week, their highest level since 1990, and were 17% higher year-on-year, while crude imports rose by 59k b/d to 9.39 m b/d and crude oil production reached 5.48 m b/d, according to the latest data from the US Department of Energy. US gasoline stocks dropped by 944k bbl to 216.5m bbl, roughly unchanged year-on-year, while refinery utilisation fell by 1.47% to 80.4%, its lowest level since the Hurricane-related disruptions in September 2008. Gasoline imports increased by 68k b/d to 1.07 m b/d, while demand dropped by 80k b/d to 8.94 m b/d and production dropped by 53k b/d to 8.91 m b/d. Distillate stocks dropped by 1.17 m bbl to 139.6 m bbl, still 32% higher year-on-year, while imports fell slightly by 17 k b/d to 144 k b/d, and production rose by 33k to 3.95 m b/d.

By late afternoon in London, ICE Brent was trading at $ 51.50/bbl.

China's soyabean imports rose for the third consecutive month to 3.86 Mt, representing a 66% increase from a year earlier. That represents the highest monthly imports in six months, down by 7% compared with the previous record of 4.13 Mt set in September 2008.

China’s iron ore imports totalled 52.08 Mt in March, hitting an all-time high, customs data show. This represents an 11% increase from the previous monthly record of 46.74 Mt set in February. The first three months of imports totalled 131.47 Mt, up by 19% compared with 110.69 Mt in the 1q08.