News archive September 2010

Combined outstanding sales of US wheat, soyabean and corn are currently 50% higher than the recent average for this time of year, according to data published by the country's Department of Agriculture. For the week ending September 23, 2010, outstanding sales for the three grains stood at 42.2 Mt, some 14.1 Mt higher than the five-year average (for 2005/06 to 2009/10 inclusive) and 6.9 Mt higher than at the same point in 2009. Outstanding sales of wheat are 29% higher than the five-year average at 7.9 Mt, with corn (14.1 Mt) and soyabean (20.2 Mt) outstanding sales 22% and 93% higher than the five-year average, respectively

Combined outstanding sales of US wheat, soyabean and corn are currently 50% higher than the recent average for this time of year, according to data published by the country's Department of Agriculture. For the week ending September 23, 2010, outstanding sales for the three grains stood at 42.2 Mt, some 14.1 Mt higher than the five-year average (for 2005/06 to 2009/10 inclusive) and 6.9 Mt higher than at the same point in 2009. Outstanding sales of wheat are 29% higher than the five-year average at 7.9 Mt, with corn (14.1 Mt) and soyabean (20.2 Mt) outstanding sales 22% and 93% higher than the five-year average, respectively.

According to data from the China Iron & Steel Association quoted in the Chinese media, national daily crude steel output fell by 9% from the first ten days in September to 1.55 Mt during the following ten days. Although the statistics are not comprehensive in their coverage of the Chinese steel sector, they do provide some indication of the impact of recent energy saving measures.

Petroleum product exports from the Former Soviet Union averaged 2.82 mb/d in August, down from the 2.97 mb/d shipped during July, but a 31 kb/d increase year on year, Argus reports. Mogas exports averaged 100 kb/d, down 36 kb/d mom and 120 kb/d yoy; naphtha shipments were down 35 kb/d mom, but up 42 kb/d yoy at 277 kb/d; gasoil exports averaged 850 kb/d, a decline of 23 kb/d mom and 69 kb/d yoy; whilst vacuum gasoil shipments fell by 111 kb/d mom and 19 kb/d yoy to 179 kb/d. Jet fuel exports increased by 11 kb/d mom, but fell by 12 kb/d to 32 kb/d last month, leaving fuel oil as the only product to show both a monthly and an annual rise in exports, increasing as they did by 39 kb/d mom and 209 kb/d yoy to an average of 1.38 mb/d.

Chinese refiners have purchased 920 kb/d of West African crude for October loading, a 200 kb/d increase from volumes bought for September loading, Argus reports. Buyers were encouraged by a fall in both freight rates and benchmark crude prices at the time when October stems began to be offered. The end of maintenance at many plants has also increased demand. Nevertheless, a fall in Indian demand for West African crude will see overall volumes heading east fall from 1.61 mb/d this month to 1.59 mb/d in October.

According to the Ministry of Finance, Japanese export growth fell for the sixth consecutive month in August, with an annual pace of 15.8% in August, down from the previous estimate of 19% and far below the peak of 45.3% growth in February. The weak export data highlights the risks to Japan's economy from a strong yen.

The price of wire rod in China edged higher last week, according to data from U-Metal. The FOB price climbed $5/t to $635/t. The current price marks a gain of $40/t from the end-August level.

According to the latest quarterly program, crude exports along Russia's Transneft pipeline system during 4q10 will average 4.08 mb/d, unchanged from the previous quarter and up 93 kb/d yoy, reports Energy Intel. Exports from Baltic ports will increase by 40 kb/d qoq to 1.43 mb/d, but this represents a decrease of 108 kb/d yoy. Black Sea shipments will decline by 92 kb/d qoq, and by 149 kb/d yoy to an average of 1.12 mb/d. Exports from the Pacific port of Kozmino, which only began at the very end of last year, will average 326 kb/d, up 4 kb/d qoq and 302 kb/d yoy.

Last week saw US crude stocks build by 1.0 MB to a total of 358.3 MB, as imports increased by 295 kb/d to an average of 9.33 mb/d, according to the latest data from the EIA. Over the same period, mogas inventories saw a 1.6 MB build to 226.1 MB, with imports increasing by 206 kb/d to an average of 850 kb/d. Distillate stocks edged 0.3 MB higher to 174.9 MB as imports averaged 203 kb/d, up slightly from 194 kb/d the week before. US refineries were operated at 87.8% of total capacity, up from 87.6% a week earlier, whilst crude inputs increased by 41 kb/d to 15.05 mb/d.

August global steel output fell for the third consecutive month, down by 1.5 Mt from last month to 112.9 Mt, according to the World Steel Association. This represents the lowest level since February. However, this is 4.5 Mt higher than the year-ago level and almost identical to the August 2008 level. The biggest month-on-month fall was in the EU, where output fell by 1.65 Mt to a year-to-date low of 12.1 Mt. However, China (-1.1% to 51.6 Mt) and the FSU (-6.1% to 8.7 Mt) were the only major producing areas to record year-on-year decline in August. Global steel production in the first eight months to 932 Mt was up by 22% year-on-year.

The Indonesian government intends to sell 3 MB of the country's crude oil reserves on the spot market during the remainder of this month and next, Dow Jones reports. The decision comes in order that the government's aim to sell 965 kb/d this year may be met. Indonesia's crude and condensate inventory currently amounts to 11.58 MB.

According to the latest data from KNOC, South Korean crude oil imports averaged 2.44 mb/d in August, a 90 kb/d increase from the same month in 2009. The country's refineries also processed 2.44 mb/d last month, up 100 kb/d year-on-year.

Sudan's crude output has fallen this year to around 450 kb/d, against a 2010 target of 600 kb/d and below the average 475 kb/d seen in 2009, mainly due to a sharper --than-expected decline in Nile Blend output, which is down 20% at around 140 kb/d, reports Energy Intelligence. In addition, Dar Blend is underperforming, averaging 250 kb/d, versus a heralded 300 kb/d, while several of the smaller fields are also recording below target output levels. The poor performance raises several suspicions, ranging from alleged underreporting of production to conceal revenues siphoned off by the north to supposed poor reservoir management by the operating companies, leading to extreme water incursion and premature peaking of wells.

OECD commercial inventories for crude and products rose by 603 kb/d in August to a new record level of 2.8 billion barrels, surpassing the previous record of August 1998, reports Energy Intelligence. This puts forward cover at 61.8 days, up from 60.6 days at end-June. The growing stocks have, so far, not caused a price collapse, so OPEC is not expected to resort to production cuts in its next meeting next month. Middle distillate stocks in the OECD rose 419 kb/d in August so are more than ample as winter approaches. In the US, diesel and heating oil stocks recently reached 176 mb, the highest level since 1983, cushioning the market even in case of a prolonged cold snap and if economic activity takes off.

German iron ore imports fell by 15% month-on- month to 4.2 Mt in July, but were still 1.7 Mt higher than the same month last year, according to customs data. Inbound iron ore shipments from the largest supplier Brazil rose for the third consecutive month to 2.4 Mt in July. This represents the highest level since December 2008. Total imports in Jan-July reached 25.8 Mt. This takes annualised imports to 44.2 Mt, which would be up 54% on last year's total.

US crude stocks fell 2.5 mb last week to 357.4 mb, despite imports rising 142 kb/d to 9.1 mb/d, according to the latest data from the US Department of Energy. Gasoline inventories were down 0.7 mb at 224.5 mb as imports slumped 439 kb/d to 644 kb/d. Distillate stocks were also down by 0.3 mb at 174.5 mb as imports dropped 59 kb/d to 194 kb/d. Refinery utilisation dipped 0.6% to 87.6%.

The world export price for hot rolled band was up by $20/t (+3%) month-on-month to a 12-week high of $615/t, according to World Steel Dynamics' SteelBenchmarker. The biggest monthly increase was seen in China. The implementation of energy-saving cuts to Chinese steel production has quickly impacted on steel prices, with Chinese HRB rising $24/t (+5%) from a month ago to $551/t. This represents the highest level since early May.

OPEC 11 has kept output steady in August at 27 mb/d, just 10 kb/d higher on the month, due to uncertainty over the global economy, reports Argus. A decline in Nigerian production due to pipeline damage was offset by higher Angolan output. Total OPEC production, including Iraq, was down about 50 kb/d to 29.31 mb/d, as pipeline sabotage in Iraq curtailed Kirkuk output. Figures indicate OPEC sailings fell by 450 kb/d in late August from an 18-month high in July, due to lower demand in Asia-Pacific.

Iron ore shipments from Port Hedland in West Australia slipped by 1.04 Mt to 13.6 Mt in August, according to port authority figures. China remained the largest destination with shipments of 9.7 Mt in August, unchanged from last month. In contrast, exports to Japan and South Korea dropped by 24% and 30% respectively to 1.4 Mt and 1.5 Mt.

Chinese refiners ran 34.7

China imported only 44.6 Mt of iron ore in August, according to preliminary customs data. This is the lowest monthly total since January 2009 and marks a fall of 6.6 Mt from the previous month.

The low iron ore import total was accompanied by (1) a sharp drop in steel exports (at 2.8 Mt versus 4.6 Mt in July and 5.7 Mt in June) as well as (2) the Indian monsoon season and Karnataka iron ore export
ban.

In its latest monthly report, the IEA estimates global crude throughputs at 74.7 mb/d in 3Q10, 0.6 mb/d higher than 2Q10. The rise is due to a seasonal lull in maintenance in Europe and the Pacific and higher runs in the FSU, the Middle East and Latin America. Runs are forecast to fall to 73.9 mb/d in 4Q10, due to an expected slowdown in oil demand growth, although levels would remain 1.4 mb/d higher on the year. All regions are expected to record year-on-year growth, except Latin America, where continued outages restrict runs.

China's crude imports recovered in August following the slump the previous month, with volumes 13.2% higher y-o-y at 4.95 mb/d, 10% higher on the month, according to the latest data from the US Department of Energy. Product imports fell 7.9% on the month to 606 kb/d, 5.6% lower on the year.

US crude stocks fell 1.9 mb to 359.9 mb last week as imports declined 741 kb/d to 9.6 mb/d, according to the latest data from the US Department of Energy. Crude refinery inputs were up 90 kb/d from the previous week at 14.9 mb/d, with operating rates up 1.2% at 88.2% of capacity. Gasoline inventories fell 0.2 mb to 225.2 mb as imports dropped 59 kb/d to under 1.1 mb/d. Distillate stocks were also down 0.4 mb at 174.8 mb, despite a slight rise in imports of 57 kb/d to 253 kb/d.

Iron ore exports by Canada (excluding exports to the US) rose by 1.5% year-on-year to 11.7 Mt in the 1h10, according to data from Statistics Canada. Latest data showed a shift in the country's iron ore export patterns. Total exports to China dropped by 69.5% from the year-ago level to 1.2 Mt in Jan-Jun of 2010. In contrast, Canadian iron ore exports to Germany in the 1h10 have surged to 3.3 Mt, (the single largest destination so far this year) which compares with only 0.96 Mt in the same period last year.