News archive September 2009

The world export price for HRB steel fell by $1/t from a month earlier to the current level of $545/t, down by $6/t from the year-to-date high of $551/t set two weeks ago, according to the latest SteelBenchmarker issued by World Steel Dynamics. Meanwhile, HRB prices in the EU and China have declined to $416/t (-27% m-o-m) and $415/t (-10% m-o-m) respectively. However, the US HRB price has risen by 9% from a month ago to a year-to-date high of $616/t.

According to SSY’s Capesize Iron Ore Port Congestion Index for China, average berthing delays at China’s leading iron ore discharge terminals have fallen to around 3 days compared with over 17 days in early July, the lowest level since mid-January. Meanwhile, the SSY Australian Combined Port Congestion Index has fallen to a 3-month low of around 7 days.

According to local sources, around 32 and 63 Capes are now waiting to berth at China and Australia’s ports respectively.

China imported a total of 21.97 Mt of iron ore from Australia during August, down by 20% from the record volume of 27.45 Mt set in July. The second largest supplier was Brazil, with 12.75 Mt of iron ore exports into China, up by 0.49 Mt month-on-month. Imports from India fell to a year-to-date low of 4.75 Mt in the month, posting a 33% decline month-on-month, U-metal reported.

South Korea imported 9.3 Mt of coal in August, the second highest monthly level so far this year. Total imports were up by 2 Mt yr-on-yr but were down from the record high of 10.1 Mt set in July. Coking coal imports were flat month-on-month at 1.7 Mt. Steam coal imports (including anthracite) of 7.6 Mt included a record volume of 3.4 Mt from Indonesia.

According to the International Grains Council (IGC), the latest world grain forecast for 2009/10 is up by 2 Mt from the previous month's projection to 224 Mt, however, still down by 24 Mt from a record volume of 248 Mt set in 2008/09.

World wheat exports are unchanged at 113 Mt from last month's forecast, down by 23 Mt compared to 136 Mt in 2008/09. World maize exports are projected to reach 85 Mt in 2009/10, a marginal 2 Mt rise from the previous marketing year, due to firming demand in importing countries.

According to the American Iron and Steel Institute (AISI), US steel imports in August fell by 14% from July to a 16-year low of 0.78 Mt, falling below 1 Mt for the fourth time this year. Year-to-date imports totalled 9.5 Mt. This marks a massive 51% decline year-on-year and represents the lowest level over the past 19 years.

Ferrous scrap imports into China fell by 21% month-on-month to 1.02 Mt in August after increasing for six straight months, posting the lowest monthly volume since January 2009. However, year-to-date imports totalled 9.89 Mt compared with 2 Mt in January-August 2008.

According to data from the World Steel Association released today, August world steel production rose for the fourth consecutive month with global output up by 2% month-on-month to 106.5 Mt, posting the highest level since September 2008. However, this still represents an annual drop of 5.5%.

The major growth was still in China, where production climbed by 22% year-on-year to 52.3 Mt. Steel production in the EU was down by 4% month-on-month and 32% year-on-year to 10.8 Mt in August. Monthly increases were seen in the US (-40% y-o-y to 5.2 Mt) and Japan (-18.3% y-o-y to 8.3 Mt).

Iraq's exports in August rose above 2m b/s for the second straight month and the higher rates are expected to be maintained, reports Energy Intelligence. Shipments were slightly lower than those seen in July due to maintenance in the southern oil fields and higher consumption in the north. Production is running just above 2.5m b/d. Basrah Light exports were unchanged on the month at 1.51m b/d, while Kirkuk flows in the north were at 520k b/d, down from 545k b/d. So far this month rates have been running at an average 1.9-1.95m b/d.

US distillate stocks grew 2.2m bbl last week to 167.8m bbl, 29% higher y-o-y and the highest level since Jan 1983, according to the latest data from the US Department of Energy. Imports were down 88k b/d at 147k b/d while demand dropped 127k b/d to 3.4m b/d. Gasoline inventories were up 0.5m bbl at 207.7m bbl as demand fell 282k b/d to 9m b/d and imports declined 284k b/d to 701k b/d. Crude stocks decreased 4.7m bbl to 332.8m bbl as imports fell 192k b/d to 8.9m b/d. Refinery utilisation was down 0.3% at 86.9%.

According to the latest SteelBenchmarker issued by World Steel Dynamics, the world export price for HRB steel has risen to a year-to-date high of $551/t, posting the fifth straight month of improvement. The US HRB price rose by 7% from end-August to $607/t, the highest level since November 2008. Meanwhile, the HRB price in the EU rose above $600/t for the first time in the past ten months. However, China’s HRB price continued to fall, down by 11% from its year-to-date high in late July to the current level of $437/t.

In its latest forecast, the US Department of Agriculture (USDA) projects world wheat trade during the 2009/10 marketing year to fall by 20 Mt from the previous year to 121 Mt. In contrast, USDA predicts a 4 Mt increase in global coarse grain trade for 2009/10. The estimate for global corn trade for the 2009/10 marketing year is up by 6 Mt from 2008/09 to 86 Mt.

Russia's crude pipeline exports to non-CIS countries rose 4.1% month-on-month in August to 4.06m b/d, 7.6% higher y-o-y, but shipments are still lower than in Jan-Jul reflecting a rise in domestic refining, reports Argus. Exports to Primorsk rose 8.3% from July to 1.56m b/d as maintenance on the Baltic Pipeline System was completed. Pivdenne exports returned to their usual level after a dispute with the Ukrainian authorities over tariffs caused a decline in July. Overall, Black Sea shipments rose 4% on the month to 1.15m b/d, but were 3.1% lower on the year.

According to the Organization for Economic Cooperation and Development (OECD), the indicator of industrial growth for the world in July improved to 0.8% from -1.6% a month earlier, posting strong signs of a recovery in industrial production. The indicator for China was at the forefront of the growth, at 14%. South Korea (11.7%) and India (6.2%) continue to show strong positive numbers. Indicators in the EU, the US and Japan remain substantially below zero, at -0.6%, -6% and -10.6% respectively, however, all continue to trend higher.

According to preliminary customs data, iron ore imports into China were 49.68 Mt in August; this was the first time since February that monthly imports had fallen below 50 Mt. Despite being 8.4 Mt lower than July, the August total is still up 12.3 Mt (33%) year-on-year. As a result, Chinese iron ore imports in the year to date now stand at 405 Mt, almost 100 Mt higher than during the same period last year (when 307 Mt were imported).

China's crude imports rose 18% y-o-y in August at an average 4.37m b/d, despite falling 6% from July, according to the latest data from China's Customs. Year-to-date volumes were 7.6% higher on the year at an average 3.88m b/d. Product imports were down 19% on the year at 642k b/d having dropped from 900k b/d in July. Jan-Aug imports averaged 790k b/d, , 8% lower on the year.

US crude stocks fell 5.9m bbl last week to 337.5m bbl, remaining 13% higher y-o-y despite being the lowest since January, as imports declined 481kb/d to 9.1mb/d, according to the latest data from the US Department of Energy. Gasoline inventories grew 2.1m bbl to 207.2m bbl, 10% higher on the year, as imports rose 107kb/d to 985kb/d and demand fell 195kb/d to 9.28mb/d. Distillate stocks were up 2m bbl at 165.6m bbl as imports increased 79kb/d to 235kb/d and demand weakened 15kb/d to 3.48mb/d. Refinery utilisation was unchanged at 87.2%.

In its latest report the IEA has revised its forecast for global oil demand up by nearly 0.5mb/d for both 2009 and 2010, to 84.4mb/d (-1.9mb/d y-o-y) and 85.7m b/d respectively, mostly on stronger-than-expected data in OECD N. America and non-OECD Asia. August global oil supply was down 400kb/d month-on-month at 84.9mb/d on lower non-OPEC output.

There are now some 60 fewer Capesize vessels waiting to berth at China’s iron ore ports compared with mid-June, according to information received from local sources. A total of 27 Capesize vessels are currently waiting to berth. This week SSY’s Capesize Iron Ore Port Congestion Index for China indicated that average waiting time at major China’s iron ore discharge ports has fallen to an 8-month low of 4.8 days.

Meanwhile, the number of Capesizes waiting to berth at iron ore ports in Australia, Brazil and China (as well as coal ports in Australia) has fallen to 110 as opposed to 154 in mid-June.

Daily shipments of the four North Sea crude grades that determine the price of Dated Brent are forecast to rise about 19% in October to 1.38m b/d as fields come back online after maintenance, reports Bloomberg. Combined loadings of Brent, Forties, Oseberg and Ekofisk will rise from 1.16m b/d forecast for this month. Exports of Forties crude, which comprise about 50% of the total are scheduled to rise 27% in October to average 658k b/d after the Buzzard oil field returns from maintenance early September.

China’s crude steel production rose by 3.4% in August to a record monthly high of 51.65 Mt in August, according to a source from the China Iron & Steel Association cited by Reuters. This would be the fifth successive monthly increase and would take the Jan-August total to 368.7 Mt, up 5% year-on-year.

Crude shipments to sea ports through the Transneft pipeline system are scheduled to fall 4.2% month-on-month in September to 2.63m b/d, reports Argus. Primorsk volumes are set to fall 4.5% to about 1.5m b/d due to maintenance on one of the pipelines. Shipments from Gdansk are forecast to fall 30%, although extra crude may materialise due to Russian refinery maintenance. Black Sea exports are scheduled to fall 2.3% due to lower shipments from Ukrainian ports.

Iron ore shipments from Port Hedland in West Australia rose to a year-to-date high of 14.2 Mt in August as China boosted purchases, official port data showed. This represents a 33% increase year-on-year. Shipments to China in August surged by 72% year-on-year to 9.83 Mt, built were down by 11% from its year-to-date high of 11.1 Mt set in July. Meanwhile, South Korea bought 2.11 Mt of iron ore as the second largest importer, up by 24% from the same month last year.

Having risen steadily from May to August, the price of wire rod in China has been in retreat for the last four weeks. The FOB price fell by 6% last week to a 4-month low of $496/t. This is now 21% below the year-to-date high ($629/t) in early August.

Australian coal exports in July jumped to a new monthly record of 24.9 Mt. This has largely due to the surge in China’s demand for imported coal. In doing so, this has lifted year-to-date exports to 151 Mt compared with 147 Mt in the same period last year.

Australian coking coal exports rose for the fifth consecutive month to 12 Mt, the highest level since November 2008. However, exports in the first seven months totalled 69 Mt, down by 13% from Jan-July 08.