News archive February 2009

Despite a small overall decline in import volumes, shipments of South African coal into Germany increased 2.2 Mt on the previous year to 8.0 Mt in 2008, customs data show. German coal imports from all sources slipped marginally to 41.9 Mt. Annual imports from the US also increased significantly (+2.9 Mt to 5.4 Mt), whereas coal cargoes from Australia, Canada, Colombia, Indonesia and other European sources all fell year-on-year.

Russian crude and gas condensate production continued its downward trend in January, with output falling by 0.9% to 40.01 mt compared with January 2008, Argus reports. Meanwhile, there is rising interest from Singapore to increase fuel imports from Russia through Black Sea ports, with volumes expected to reach 300,000t in March. Argus also reports crude exports from Kazakhstan increased in January, with exports through the Caspian Pipeline Consortium route rising by 6.6% compared with December 2008 and 9.6% compared with January 2008.

By late afternoon in London, ICE Brent was trading at $ 45.75/bbl.

According to the US Department of Energy, US crude oil imports dropped by 314,000 b/d to 9.717 m b/d in 2008 compared with 2007, Energy Intelligence reports. The share of imports from Middle East increased to 24%, 2% higher compared with 2007, with volumes increasing by 195,000 b/d to reach 2.357 m b/d. Saudi Arabia delivered 1.504 m b/d, up by 57,000 b/d from 2007. Imports from Mexico fell by 226,000 b/d, from Nigeria fell by 163,000 b/d and from Venezuela dropped by 109,000 b/d. The largest exporter to US was again Canada, with volumes reaching 1.928 versus 1.888 m b/d in 2007.

By late afternoon in London, ICE Brent was trading at $ 46.18/bbl.

World grain trade in the 2008/09 marketing year (July-June) is expected to fall by 12 Mt to 226 Mt, according to the latest forecast from the International Grain Council. World wheat exports are unchanged at 118 Mt from last month’s forecast, up by 8 Mt compared to 110 Mt in the 2007/08. World maize exports are projected to decrease to 79 Mt in the current marketing year from 100 Mt in 2007/08, mainly due to lower exports from Argentina.

January world steel production fell 24% year-on-year to 85.8 Mt, according to data from the World Steel Association. In the 4q08 global output fell 20% annually, having risen by 4% annually in the first nine months of the year.

Production cuts were most severe in the US (down 53% annually to 4.1 Mt), the countries of the former Soviet Union (-47% to 5.8 Mt), the EU (-46% to 9.5 Mt) and Japan (-38% to 6.4 Mt).

A more moderate decline in output was seen in India. January's production totalled an estimated 4.6 Mt (-5% year-on-year).

In contrast, Chinese steel production registered growth of 2.4% year-on-year with monthly production at 41.5 Mt. The data underline the huge disparity in the growth in China and in the rest of the world, where steel output dropped by an alarming 40% on the same month last year. As a result China's steel mills accounted for as much as 48% of global output in January compared with 36% a year earlier.

US steel imports in January were 2.1 Mt, up by 13.4% from the previous month, however, representing a 12% fall year-on-year, according to the American Iron and Steel Institute (AISI). Total imports of finished steel were up by 15.3% month-on-month to 1.9 Mt in January compared to 1.6Mt a month earlier. The largest volume of finished steel shipments was from China, slipping by 10.4% from December to 0.39 Mt in the first month of this year.

US crude inventories increased by 717k bbl to 351.3 m bbl last week,their highest level since July 2007, and were 14% higher year-on-year, while crude imports fell slightly by 24k b/d to 8.77 m b/d and crude oil production reached 5.30 m b/d, according to the latest data from the US Department of Energy. US gasoline stocks dropped by 3.32 m bbl to 215.3 m bbl, 8% lower year-on-year, while refinery utilisation dropped by 0.9% to 81.4%. Gasoline imports dropped slightly by 21k b/d to 805k b/d, while demand rose by 102k b/d to 9.0 m b/d and production increased by 172k b/d to 8.94 m b/d. Distillate stocks increased by 882k bbl to 141.6 m bbl, while imports fell by 195 k b/d to 282 k b/d, and production rose by 66k to 4.21 m b/d.

By late afternoon in London, ICE Brent was trading at $ 42.22/bbl.

Middle East Gulf gasoline demand is expected to remain strong in the first quarter, reports Argus. Iranian gasoline imports in January reached 140,000 b/d, of which nearly 40,000 b/d has gone to floating storage, with February levels expected to remain relatively high but lower than January's levels. Iranian gasoline consumption has been about 400,000 b/d since the beginning of the year. Saudi Arabia plans to import four 300,000 b/d cargoes in the second quarter, six in the third and two in the fourth, to cover shortfalls. Middle East Gulf gasoline imports from Mediterranean refineries are expected to rise in the second quarter at a time of tight supply in the Asia-Pacific.

By late afternoon in London, ICE Brent was trading at $ 41.36/bbl.

Congestion at key iron ore load ports in Western Australia has risen to a 22-month high partly as a result of rain and flooding severely affecting iron ore production, railing and loading at the terminals of Dampier and Port Walcott. SSY’s Australian Iron Ore Port Congestion Index has leapt to 10.9 days from 6.0 days last week. Furthermore, disruption at both ports is likely to persist over the coming weeks, with Rio Tinto advising that railings will only partially resume from 28 February, and local agents reporting that some berths will be closed for significant spells over the coming weeks.
In contrast, the SSY Australian Coal Port Congestion Index has slipped to 5.4 days, the lowest since November 2005. Finally, a surge of grain cargoes (primarily wheat) from Western Australian ports has led to a build-up of tonnage at Albany, Esperance, Geraldton and Kwinana. Currently 29 Handysize/max vessels are waiting to berth at the four terminals.

Angolan crude exports are estimated to reach 1.64 m b/d in April, compared with 1.59 m b/d in March, according to preliminary loading schedules, reports Argus. The production volumes in April should be 120,000 b/d higher than OPEC's quota of 1.517m b/d. However, Angola has already implemented significant output cuts since the end of last year, when production was 1.9 m b/d. In the meantime, Indonesia's spot crude supply may rise as a result of the outage at its 125,000 b/d Balongan refinery, that halted crude deliveries, Argus reports.

By late afternoon in London, ICE Brent was trading at $ 41.95/bbl.

Indonesia's coal exports in January were down by 1.1 Mt month-on-month to 13.09 Mt, the lowest level since July 2007, McCloskey reported. Decreasing shipments to Taiwan and China have impacted negatively on its exports.
However, shipments to India in January witnessed a record monthly volume. Some 2.68 Mt of coal were shipped to India, compared to 1.32 Mt in December. The January total represents a massive 55% year-on-year increase, compared with 1.73 Mt in the same month in 2008.

January world steel production fell 24% year-on-year to 85.8 Mt, according to data from the World Steel Association released today. This is the second month in a row when global output fell 24% annually.
Production cuts were most severe in the US (down 53% annually to 4.1 Mt), the countries of the former Soviet Union (-47% to 5.8 Mt), the EU (-46% to 9.5 Mt) and Japan (-38% to 6.4 Mt). Chinese steel production registered growth of 2.4% year-on-year with monthly production at 41.5 Mt.

Vietnam's first-ever refinery, state-owned Petrovietnam's 140,000 b/d Dung Quat has commenced operation, reports Petroleum Intelligence. A crude distillation unit started up in mid-February, while the plant's remaining 10 units will be brought on line over the next months. Kerosene, gas oil and naphtha have already reached the market, with production of gasoline expected to start in the second half of April. The refinery will use domestic Bach Ho crude and its sales will mainly target the domestic market. The refinery will have a capacity of 62,200 b/d of gas oil, 44,000 b/d of gasoline, 9,000 b/d of kerosene and jet fuel, 5,500 b/d of fuel oil, 300,000 tons/yr of LPG and 150,000 tons/yr of propylene.

By late afternoon in London, ICE Brent was trading at $ 41.33/bbl.

UK coal imports in 2008 increased by a modest 1.5% to 43.2 Mt, customs statistics show. The year saw shipments from the UK’s main supplier, Russia, rise by 1.4 Mt to 21.1 Mt, with US exports to the UK climbing 1.6 Mt to 4.3 Mt and imports from Colombia up 1.5 Mt to 5.3 Mt. At the same time, shipments of South African coal to UK destinations declined by 3.1 Mt to 4.2 Mt.

US crude inventories decreased slightly by 138k bbl to 350.6 m bbl last week, but were still 15% higher year-on-year, while crude imports fell by 859k b/d to 8.8 m b/d and crude oil production reached 5.32 m b/d, according to the latest data from the US Department of Energy. US gasoline stocks rose by 1.11 m bbl to 218.7 m bbl, still 5% lower year-on-year, while refinery utilisation increased by 0.7% to 82.3%. Gasoline imports dropped by 492k b/d to 826k b/d, while demand also fell by 98k b/d to 8.9 m b/d and production rose by 273k b/d to 8.77 m b/d. Distillate stocks decreased by 813k bbl to 140.8 m bbl, while imports rose by 331 k b/d to 477 k b/d, their highest level since December 2006, and production remained almost steady at 4.15 m b/d.

By late afternoon in London, ICE Brent was trading at $ 41.22/bbl.

Japanese crude stocks reached 124.1 m bbl in November, compared with 123.5 m bbl in October, having increased 5.2% year-on-year, according to lEA. Japanese motor gasoline stocks reached 13.7 m bbl in November, relatively steady compared with October's levels, but 16.1% higher compared with the same month last year. Middle distillate stocks in November increased by 6.3% year-on-year to 49.1 m bbl, but they have decreased by 3.7 m bbl compared with October.

By late afternoon in London, ICE Brent was trading at $ 40.10/bbl.

Japan crude steel production slumped by 14.9% from the previous month to 6.37 Mt in January, according to the latest data from the Japan Iron and Steel Federation. The January total represents a massive 37.8% year-on-year fall as cuts were implemented in response to collapsing demand.

Chinese demand for West African crude wanes, with exports estimated to reach 580,000 b/d in the first quarter of 2009, Argus reports. This is compared with 960,000 b/d in the same period in 2008, when robust demand for distillates boosted Chinese imports. Faltering demand for West African crude has been partly offset by lower supply, with Angola's crude exports estimated to reach 1.5 m b/d in February, compared with 1.8 m b/d in January, with OPEC quota being 1.517 m b/d. Angolan shipments in March are scheduled to be 1.57 m b/d.

By late afternoon in London, ICE Brent was trading at $ 41.22/bbl.

The SSY Australian Coal Port Congestion Index fell to show average waiting times of 6.16 days at the end of last week. According to the Hunter Valley Coal Chain Logistics Team (HVCC), the Newcastle vessel queue stood at around 17 at the end of last week. HVCC expects the queue to decrease to 9 by the end of February.

More flooding has been reported in the Pilbara region of West Australia, causing the disruption of iron ore loading and berthing at Dampier and Cape Lamber ports operations by Rio Tinto. The region has been impacted by heavy storms, according to the state's Fire & Emergency Services.

Omani crude and condensate output is expected to rise by about 50,000 b/d to 805,000 b/d in 2009, Argus reports. Output in 2008 reached 760,000 b/d compared with 710,000 b/d in 2007. Omani state-controlled PDO's crude production dropped 5,000 b/d to 555,000 b/d in 2008, with enhanced oil recovery projects expected to stabilise production at this level until 2012. PDO's condensate production increased by 29,000 b/d in 2008 compared with the previous year, while it is projected to increase to 90,000-100,000 b/d by 2011.

By late afternoon in London, ICE Brent was trading at $ 44.34/bbl.

US steam coal exports in December totalled 2.5 Mt (excluding exports to Canada), compared to 1.8 Mt in the same month in 2007, the highest level since December 1996. Annual steam coal exports in 2008 increased for the fourth consecutive time, at 17.6 Mt, the highest level since 1999.US coking coal exports in December were down by 45% from November to 1.6 Mt, the lowest monthly total in 2008. However, this brings annual coking coal exports in 2008 to 35.3 Mt, representing an increase of 36.4% year-on-year.

Stocks of gasoil and jet fuel in the Amsterdam-Rotterdam-Antwerp (ARA) area rose to their highest level since 2003 on January 29, with inventories of gasoil at 2.55 million tons, and jet fuel at 832,000 tons, Energy Intelligence reports.
Middle distillate inventories increased by 0.5% to 370.13 million bbl month-on-month in January, having increased by 1.4% compared with the
same month last year, according to monthly Euroilstock data for Western Europe. Meanwhile, almost 600,000 b/d, or 5%, of Europe's crude distillation capacity is expected to be offline in March.

By late afternoon in London, ICE Brent was trading at $ 45.35/bbl.

According to the latest data from the European Union statistics office, Eurozone industrial production has shown further evidence of deepening recession. Industrial production in the 15 European countries in December contracted by 2.6% from November and 12% year-on-year, the most rapid monthly and annual falls since data has been recorded.

China’s crude imports dropped by 8.0% y-o-y in January to 3.04m b/d, having decreased 10.8% from December levels according to the latest data from China Customs. Product imports were down 26% on the year at 566,000 b/d having dropped 34% from December.
Meanwhile, Argus reports that Iran is currently holding about 1.5 m bbl of 0.5% sulphur gasoil in floating storage off the Kharg island and is considering re-exporting it due to low domestic demand and high inventories.

By late afternoon in London, ICE Brent was trading at $ 44.32/bbl.