News archive May 2009

South Korean crude imports grew by 4.3% to 2.35 m b/d in April month-on-month, reports Energy Intelligence, citing data from the State Korea National Oil Corp. Imports from Saudi Arabia fell by 3.5% to 656,000 b/d, while imports from Iran rose by more than 80% to 318,000 b/d. Imports from UAE dropped by almost 33% to 277,000 b/d. Total Middle East imports rose by 4.1% to 1.98 m b/d, as volumes from Qatar, Iraq and Oman also rose. Asia-Pacific imports grew by 22.5% to 272,400 b/d, while volumes from Russia fell by 22.1% to 56,000 b/d.

By late afternoon in London, ICE Brent was trading at $ 65.16/bbl.

According to the International Grains Council (IGC), the latest world wheat trade forecast for 2009/10 is unchanged from the first projection, down by 10 Mt from a record volume of 122 Mt set in 2008/09 to 112 Mt. Because of firmer world demand, world maize trade is expected to increase by 2 Mt to 83 Mt, mainly due to a rebound in US exports.

US steel imports in April fell by 21% from the previous month to 1.1 Mt, representing a 37% fall year-on-year, and the lowest monthly level since May 1993, according to the American Iron and Steel Institute (AISI). Imports from leading supplier China dropped by 50% from March to 0.09 Mt.

US crude inventories fell by 5.4 m bbl to 363.1 m bbl last week, but still were 17% higher year-on-year, while crude imports fell slightly by 13k b/d to 8.78 m b/d and crude oil production reached 5.36 m b/d, according to the latest data from the US Department of Energy. US gasoline stocks dropped by 0.54 m bbl to 203.4 m bbl, 1.3% lower year-on-year, while refinery utilisation rose by 3.3% to 85.1%. Gasoline imports rose by 67k b/d to 1.01 m b/d, while demand grew by 306k b/d to 95.38 m b/d, the highest level since September 2007, and production rose by 643k b/d to 9.38 m b/d, the highest level since August 2008. Distillate stocks rose by 0.25 m bbl to 148.4 m bbl, 36% higher year-on-year, while imports rose by 30 k b/d to 203 k b/d, and production fell by 96k b/d to 4.04 m b/d.

By late afternoon in London, ICE Brent was trading at $ 63.80/bbl.

China’s iron ore imports rose by 9% month-on-month to 57 Mt in April, hitting a new monthly record. Imports from leading supplier Australia jumped by 15% m-o-m to 22.65 Mt. Volumes from India fell by 14% to 11.16 Mt, making India the third biggest supplier in April. A record volume of 12.78 Mt was shipped into China from Brazil, making Brazil the second largest supplier for the first time this year.

Japan's crude imports fell 11.1% to 3.97 m b/d in April compared with the same month last year, reports Reuters, citing preliminary data from the Japanese Ministry of Finance. In March, Japanese crude oil imports fell by 18.4% to 3.68 m/b year-on-year. Meanwhile, FSU gasoil exports rose by 39,000 b/d to 866,000 b/d in April year-on-year and fuel oil exports rose by 115,000 b/d to 1.14 m b/d compared with April last year, reports Argus.

By late afternoon in London, ICE Brent was trading at $ 61.55/bbl.

Rio Tinto has announced that a 33% drop in the contract price for iron ore fines for the 2009 financial year has been agreed with Nippon Steel. This is accompanied by a 45% fall in the FY 2009 iron ore lump price. As yet there has been no settlement involving Chinese steel mills.

Despite the decline, this would still leave the iron ore contract price above the level of the FY 2007 settlement.

FSU crude exports rose in April month-on-month, reports Argus. Specifically, exports through the Black Sea ports increased by 65,000 b/d to 1.25 m b/d compared with March, although they were down 123,000 b/d on the year. Exports through the Baltic ports in April increased by 73,000 b/d to 1.66 m b/d compared with March, having fallen by 52,000 b/d compared with the same month last year.

By late afternoon in London, ICE Brent was trading at $ 59.48/bbl.

China increased diesel exports eight-fold in April, while Chinese gasoline exports rose to the highest level since mid-2007, as refiners sought to reduce record-high inventories, reports Reuters, citing the Chinese General Administration of Customs. Specifically, diesel exports rose 761.5% to 510,000 tonnes, compared with the same month last year and were 27% higher compared with March. Gasoline exports rose 114% to 310,000 tonnes year-on-year.

By late afternoon in London, ICE Brent was trading at $ 60.04/bbl.

The price of Chinese wire rod has risen for the seventh consecutive week. Chinese wire rod prices increased to $508/t at the end of this week, representing the highest level in 14 weeks. This is still below the $560/t year-to-date high set in mid-February.

Global oil inventories rose by 32 m bbl in April, compared with March, reaching 6,887 m bbl, reports Energy Intelligence. North American crude inventories rose by 21 m bbl month-on-month to 1,361 m bbl at the end of April, having grown by 138 m bbl compared with April 2008. Europe's crude inventories stood at 342 m bbl at the end of April, 3 m bbl lower than in March and 6 m bbl higher than in April 2008. Pacific crude inventories dropped by 1m bbl month-on-month to 168 m bbl in April, having dropped by 7 m bbl compared with a year earlier level.

By late afternoon in London, ICE Brent was trading at $ 59.08/bbl.

Iron ore exports at Indian's major ports in April fell for the third consecutive month, according to data from the Indian Port's Association. Some 8.63 Mt of iron ore was handled at Indian's major ports in April, down by 3% from the previous month and representing a 12% fall year-on-year. Exports from Port Mormugao rose by 11% year-on-year to 4.51 Mt, while the rest of major ports has reported dramatic falls in exports in the past months.

World steel output in April totalled 89.5 Mt, down 3% on the previous month, according to data from the World Steel Association. The world total for April marks a decline of 23.6% year-on-year.

Substantial year-on-year falls in steel production were still in evidence in many traditional steelmaking centres, such as the US (down 53% to 3.9 Mt), the EU-27 (down 49% to 9.5 Mt) and Japan (down 44% to 5.7 Mt). Output in the former countries of the Soviet Union dropped 30% annually to 7.4 Mt.

China produced 43.4 Mt (down 4% YoY) in April, while India saw a gain on April last year (up 8% to 4.6 Mt).

US crude inventories fell by 2.1 m bbl to 368.5 m bbl last week, and were 15% higher year-on-year, while crude imports grew by 83k b/d to 8.79 m b/d and crude oil production reached 5.35 m b/d, according to the latest data from the US Department of Energy. US gasoline stocks dropped by 4.38 m bbl to 204.0 m bbl, 2.6% lower year-on-year, while refinery utilisation fell by 1.89% to 81.8%. Gasoline imports rose by 191k b/d to 938k b/d, while demand grew by 321k b/d to 8.91 m b/d, the highest level since August 2008, and production rose by 25k b/d to 8.74 m b/d. Distillate stocks rose by 0.67 m bbl to 148.1 m bbl, 37% higher year-on-year, while imports fell by 33 k b/d to 173 k b/d, and production remained almost steady at 4.13 m b/d. Meanwhile, Brazilian state oil company Petrobras signed a contract with Chinese refiner Sinopec to supply crude oil over 11 years, starting with 150,000 b/d in 2009 and reaching 200,000 b/d between 2010-2019, reports Platts. The contract was accompanied by a 10-billion US$ loan agreement between Petrobras and state-owned China Development Bank.

By late afternoon in London, ICE Brent was trading at $ 58.19/bbl.

China's coal imports soared to an all-time high of 9.16 Mt in April, according to China's Customs Statistics. This is some 3.4 Mt higher than the March import total, itself a record at the time. As a result January-April imports climbed to 22.77 Mt, up around 52% on the same period last year.

Saudi Aramco's gasoline imports in June are expected to drop to almost 50,000 b/d, compared with 80,000 b/d in May, reports Argus. The drop is mainly due to Aramco's new 92,000 b/d catalytic cracker coming on stream at its 400,000 b/d Rabigh refinery, which is to produce up to 60,000 b/d of gasoline. Moreover, Ras Tanura 325,000 b/d refinery is expected to return to full throughputs on 20 May.

By late afternoon in London, ICE Brent was trading at $ 58.19/bbl.

Asia-Pacific imports of West African crude are expected to reach a 3-year high of 1.66 m b/d in June, mainly due to demand from China, India and Taiwan, reports Argus. West African crude exports to China are expected to rise to 880,000 b/d in 2Q09, up by 300,000 b/d compared with Q109. China is to take some of the additional Angolan crude exports in June, which are projected to rise to 1.84 m b/d, compared with 1.55 -- 1.63 scheduled in March, April and May. India is forecast to increase imports of West African crude by 160,000 b/d to 560,000 b/d in June.

By late afternoon in London, ICE Brent was trading at $ 57.93/bbl.

Iron ore stockpiles at China’s discharge ports have risen for the fourth consecutive week, and are up by 10 Mt in the past four months to over 71 Mt by the end of last week. However, this is still lower than the 4q08 peak of 74.4 Mt.

BTC Blend exports from the Turkish port of Ceyhan in June are scheduled to be 800,000 b/d, down by more than 70,000 b/d compared with May, reports Argus. Exports of CPC Blend from the CPC oil terminal near Novorossiysk are scheduled to reach 678,000 b/d in June, up by 29,000 b/d compared with May export programme. Meanwhile, Turkmen crude production is expected to rise to 218,000 b/d in 2009, up by almost 4% over 2008.

By late afternoon in London, ICE Brent was trading at $ 58.03/bbl.

Congestion at China's iron ore ports eased slightly this week, although with some 66 Capesizes waiting to berth, queues remain at historically high levels. Furthermore, this would imply that some 11-12 Mt of iron ore is effectively being held offshore while vessels wait to berth.

Global oil demand for 2009 was again revised downwards by 0.2 m b/d to 83.2 mb/d, 2.6mb/d lower year-on-year, according to the latest IEA Oil Market Report. Global oil supply for April rose month-on-month by 0.23 mb/d to 83.6mb/d, having dropped by 2.8mb/d on the year. Non-OPEC supply growth in 2009 was revised upwards by 50kb/d, after stable North Sea production and higher-than-expected Russian production and supply is projected to contract by 300 kb/d in 2009. OECD industry stocks rose by 15.4 m bbl to 2,745 mb, with the forward demand cover estimated at 62.4 days, 8.0 days higher year-on-year.

By late afternoon in London, ICE Brent was trading at $ 56.50/bbl.

According to the World Steel Dynamics’ SteelBenchmarker, the World export price for Hot Rolled Band edged lower once again this week, slipping by $1/t over the last two weeks to stand at $394/t. This represents a massive 63% fall year-on-year.

China’s crude imports rose 13.5% y-o-y in April to 16.17Mt, or 3.96m b/d, the second highest daily rate on record, having risen 2.2% on a daily basis from March levels, according to the latest data from China Customs. Year-to-date levels averaged 3.48m b/d, down 3.9% y-o-y. Product imports were up 2.7% on the year at 881k b/d having risen 19% from March. However, year-to-date levels were relatively unchanged

China’s steel exports sank to the lowest level since June 2004, falling by 16% from the previous month to 1.41 Mt in April and representing a massive 71% fall year-on-year, according to data from China’s General Administration of Customs. At 2.3 Mt, imports of steel to China in April reached a 3.5-year high, jumping by 32% from a month earlier and representing a massive 51% increase year-on-year. As a result, China became a net importer for the second consecutive month.

Chinese passenger car sales reached a record high of 831,000 in April, 37% higher year-on-year, having increased by 7.6% compared with March, according to China's Association of Automobile Manufacturers.

Meanwhile, US crude inventories fell by 4.6 m bbl to 370.6 m bbl last week, and were 14% higher year-on-year, while crude imports fell by 1.21 m b/d to 8.70 m b/d and crude oil production reached 5.31 m b/d, according to the latest data from the US Department of Energy. US gasoline stocks dropped by 4.15 m bbl to 208.3 m bbl, 1% lower year-on-year, while refinery utilisation fell by 1.62% to 83.7%. Gasoline imports dropped by 76k b/d to 747k b/d, while demand fell slightly by 12k b/d to 8.91 m b/d and production dropped by 208k b/d to 8.71 m b/d. Distillate stocks rose by 0.92 m bbl to 147.5 m bbl, 38% higher year-on-year, while imports grew by 41 k b/d to 206 k b/d, and production dropped by 77k to 4.13 m b/d.

By late afternoon in London, ICE Brent was trading at $ 58.29/bbl.