News archive May 2011

South Korea imported 2.53 mb/d of crude oil during April, up 193 kb/d (8.2%) from the same month during 2010, Energy Intel reports. Saudi Arabia remained the country’s main supplier, providing 875 kb/d last month, up 81 kb/d (10.2%) yoy. Imports from Kuwait saw a hefty 98 kb/d (47.3%) yoy rise, reaching 305 kb/d, whilst Qatari shipments increased by 82 kb/d (54.7%) yoy, to 232 kb/d. Imports from Iran declined by 103 kb/d (-36.8%) yoy, to 177 kb/d. Russia and Indonesia were the only other major suppliers to see a significant decline in their exports to South Korea.

The price of Chinese wire rod edged higher, up $6/t week-on-week to $746/t for the week ending 27 May, according to World Steel Dynamics. This compared with the year-to-date high of $752/t in the beginning of May. China’s wire rod prices averaged $733/t in May, posting the highest monthly average since August 2008.

According to the latest data from state oil company, Pemex, Mexican crude oil production averaged 2.57 mb/d during April, unchanged from the month before. Crude exports, however, saw a 201 kb/d month-on-month decline, falling to 1.22 mb/d.

US steel imports rose 22% year-on-year to 2.3 Mt in April, posting the highest level since October 2008, according to the American Institute for International Steel. Imports in the first four months of this year rose by 21% year-on-year to 8.1 Mt.

In its latest projection, the International Grains Council (IGC) expects global grain trade (wheat and coarse) for 2011/12 (Jul-Jun) trading year to up by 3.2 Mt on this year to 243.6 Mt (126.7 Mt of wheat and 116.9 Mt of coarse grain). The IGC expects to see a sharp annual increase (+16.9 Mt) in grain (wheat and coarse) exports from the FSU (Russia, Ukraine and Kazakhstan), up by 16.9 Mt from 2010/11 to 37.6 Mt in 2011/12. Meanwhile, IGC anticipates a modest year-on-year increase from Argentina (+1.2 Mt to 25.9 Mt), Australia (+0.2 Mt to 22.4 Mt) and Canada (+1 Mt to 21.4 Mt) in 2011/12. By contrast, downward forecasts are predicted for the US (-5.7 Mt to 82.1 Mt), Brazil (-4.7 Mt to 9.8 Mt) and the EU (-4.2 Mt to 23.4 Mt).

According to the final monthly Chinese customs data for April, the country's diesel exports fell to 218kt last month (around 54 kb/d), a 61% drop yoy. Imports of the product totalled 130kt (32 kb/d), up 26% yoy. Mogas exports also dropped sharply, falling 46% yoy, to 375kt (105 kb/d), whilst imports remained negligible. Jet fuel exports were up 32% yoy at 504kt (132 kb/), with imports rising by 26% yoy to 451kt (118 kb/d).

Detailed customs figures for China’s iron ore imports in April revealed an especially sharp month-on-month drop in imports from Brazil, which tumbled by 28% from their March level to 9.7 Mt. This was the first sub-10 Mt monthly total on this trade since June 2010 and followed weather-related disruptions to Brazilian cargo availability in the 1q. Chinese imports from India (-15% to 9.0 Mt) and Australia (-4% to 20.8 Mt) also showed monthly declines in April, while cargoes from South Africa bucked the downward trend, rising 0.6 Mt (24% to 3.1 Mt).

According to the latest data from the EIA, US mogas inventories rose by 3.8 MB last week, to 370.9 MB, after imports leapt by 585 kb/d, to 1.45 mb/d. Despite the increase, mogas stocks remained 5.4% lower than at the end of the equivalent week last year. Meanwhile, crude inventories posted a 0.6 MB increase from the week before, reaching 370.9 MB, as imports rose 662kb/d, to 9.23 mb/d, over the same period. Distillate stocks declined by 2.0 MB, to 141.1 MB, whilst imports were 9 kb/d lower, at 103 kb/d. Crude inputs at US refineries rose by 494 kb/d week-on-week, to 14.84 mb/d. Overall refinery utilisation rose from 83.2%, to 86.3%, of total capacity.

World HRB export prices have slipped below $730/t for the first time since January, according to the latest SteelBenchmarker from World Steel Dynamics. However, at $728/t export prices have fallen by a marginal $4/t over the last two weeks. Domestic prices in China have also remained stable, but there is evidence of some price erosion within the US and Europe where HRB prices have fallen by 4.3% and 2.0% respectively over the past two weeks. This could put margins at some high cost mills under pressure as quarterly iron ore contract prices in the 3q11 are set to be close to their 2q record.

The Indian Prime Minister has officially opened Bharat Petroleum’s (BPCL) new 120 kb/d refinery at Bina, in the Sagar district of the Indian state of Madhya Pradesh, the Times of India reports. The refinery has been set up to produce LPG, Euro III and IV spec mogas and diesel, jet fuel and naphtha. The refinery is a joint project between BPCL and the Oman Oil Company.

April trade data shows a sharp monthly increase in anthracite coal imports and modest growth in coking (+9% to 3.2 Mt) and steam coal (+3% to 4.1 Mt) imports, according to China Customs Statistics. April anthracite imports rose 81% month-on-month to 3.8 Mt (of which 65% came from Vietnam), representing the highest level since June 2009. Total imports from Indonesia rose by 9% from last month to 3.1 Mt, whereas shipments from Australia jumped 39% to 1 Mt. However, long-haul shipments from South Africa (0.3 Mt), Canada (0.2 Mt) and the US (0.4 Mt) suffered a 2%-11% of decline in the same month. There were no imports from Colombia to China in April.

A 1.5 mb/d pipeline between Habshan and Fujairah, in the UAE, is set to begin operations during 1q12, Argus reports. The line will allow exports of Abu Dhabi Murban crude to bypass the Hormuz straits, a focal point for piracy in the region. Around 1.3 mb/d of Murban is currently shipped from Jebel Dhanna, much of it heading east to refiners in South Korea, Japan, India and Thailand. All of this could eventually be transported along the new line, but volumes will initially flow from both points, making two export prices for the grade a possibility.

According to the latest loading schedule, exports along the CPC Pipeline, shipped from near Novorossiysk, are planned at 688 kb/d during June. This represents a 137 kb/d increase from scheduled loadings this month.

BTC Blend exports from Ceyhan are scheduled to average 777 kb/d next month, up 62 kb/d from May’s planned loadings.

April data from World Steel Association show a 2% decline in global crude steel production on the previous month. Production in April amounted to 126.9 Mt, which was 5% higher than year-on-year. Total global crude steel production in the first four months of the year was 499.7 Mt, an increase of 8% year-on-year.

UK coal imports in March rose by 1.7 Mt (+7%) month-on-month and 0.6 Mt (+28%) year-on-year to 2.6 Mt, the highest monthly volume since October 2010, according to Customs Statistics. As a result, imports in the 1q11 reached 7.1 Mt, an increase of 10% on the corresponding period last year.

Imports of coal into Taiwan in April rose by 0.3 Mt month-on-month and 0.6 Mt year-on-year to 6.0 Mt, representing the highest monthly import volume since August 2009, according to trade data. Imports from Indonesia fell 16% from March to an 8-month low of 2.0 Mt, while shipments from Australia rose 13% from March to a 5-month high of 2.3 Mt. Imports from South Africa (0.8 Mt) reached its highest monthly level.

Japanese utility firm, Chubu Electric has been forced to begin shutting down two reactors of a combined 3,600 MW at its Hamaoka nuclear power plant whilst improvements to earthquake and tsunami defences are made, Argus reports. As a result, the firm will restart oil-fired plants and increase crude and fuel oil purchases for the next year from a planned 13 kb/d, to around 35 kb/d. Chubu's shutdowns will leave Japan with 38% of its nuclear power capacity still operational. April saw refinery throughputs in the country fall to 3.3 mb/d, down from February's pre-earthquake level of just above 4.0 mb/d. Low-sulphur fuel oil imports topped 100 kb/d last month, up from 32 kb/d during April 2010.

After rising for six consecutive weeks, the price of Chinese wire rod fell by $12/t week-on-week to $740/t for the week ending 13 May, but was still up by $156/t or 27% year-on-year, according to World Steel Dynamics.

For the first time since January 16, India's three state-owned oil firms have raised gasoline prices in response to increased crude prices, Platts reports. The retail price of gasoline has been increased by the equivalent of $0.11/litre, to $1.39/litre. The prices of other petroleum products regulated by the government -- gasoil, LPG and kerosene - remain unchanged, and have done so since June 2010.

China has suspended diesel exports, and placed restriction on shipments of other oil products, in an attempt to prevent domestic shortages, Reuters reports. The banning of diesel exports comes after state refiner, Sinopec, suspended shipments last month. March had already seen Chinese diesel exports fall by 44% yoy, to 63 kb/d. Supplies are likely to tighten further if current power shortages, prompted by limited coal supplies in the south and east of the country, force the use of diesel-powered generators. The IEA estimates that this could add up to 300 kb/d to Chinese gasoil demand.

US seaborne coal exports in March (excluding those to Canada) rose for the eighth consecutive month to 8.7 Mt (5.9 Mt of coking coal and 2.8 Mt of steam coal), up 48% year-on-year to the highest monthly level since August 1991, trade data shows.
Exports in the 1q11 were 23.5 Mt, up by 52% from the 15.5 Mt in the 1q10.

In its latest monthly report, the IEA revised down its 2011 global oil demand forecast by 190 kb/d, to 89.2 mb/d. The revision was prompted by lower economic projections from the IMF, as well as an extended period of elevated oil prices. Anticipated OECD demand for the year was lowered by 210 kb/d, to 45.9 mb/d, whilst non-OECD demand is forecast at 43.3 mb/d, a 20 kb/d upward revision. The agency's demand estimate for 2010 was adjusted by 40 kb/d, to 87.9 mb/d. Global oil supply during April fell by 50 kb/d, to 87.5 mb/d, after OPEC output dropped a further 235 kb/d. to 28.75 mb/d.

China's crude steel production remained at a high level in April, down 0.5 Mt from March to 59.0 Mt, but 7% higher than year ago level, according to the National Bureau of Statistics. This is not far short of the monthly all-time high reached in January 2011 of 59.9 Mt.

According to preliminary customs data, Chinese crude oil imports averaged 5.28 mb/d during April, a 90 kb/d increase from a year earlier, and up 139 kb/d from March. The rise came despite a government mandated fuel price increase on April 7 that did not fully offset crude price gains. Fuel demand remained buoyant as factory exports reached a record high. Meanwhile, product imports totalled 3.22 million tonnes last month, down 0.66 million tonnes from March and by 0.19 million tonnes yoy. Product exports also declined, by 0.53 million tonnes yoy, and 0.52 million tonnes mom, to 2.05 million tonnes.