News archive November 2011

The latest data from the EIA reveal that U.S. distillate inventories rose by 5.5 MB last week, to 138.5 MB, bucking the recent trend of significant stock draws. After the seasonally strong demand of recent weeks, U.S. distillate consumption slumped by 829 kbpd from the previous week, to 3.24 mbpd, a level 11.7% lower than during the equivalent week in 2010. Demand, however, remains 2.9% higher yoy over the last 13-weeks. Distillate exports averaged 958 kbpd last week. Meanwhile, the recent rise in gasoline stocks slowed, with inventories 0.2 MB higher, at 209.8 MB. Imports dropped by 337 kbpd, to 619 kbpd, whilst demand rose by 177 kbpd, to 8.77 mbpd. Crude inventories were 3.9 MB higher last week, at 334.7 MB, as imports rose by 742 kbpd, to 9.06 mbpd. Crude runs at U.S. refineries dropped by 231 kbpd, to 14.57 mbpd, as overall utilisation slipped from 85.5%, to 84.6%, of total capacity.

According to the latest SteelBenchmarker produced by World Steel Dynamics, the world export price for Hot Rolled Band (HRB) has fallen to a new year-to-date low of $612/t, down by $23/t from two weeks ago. HRB prices in Europe continued to soften to $652/t, down $11/t to the lowest level since mid-March 2010. Meanwhile, after a small recovery in early November, the HRB price in China slipped again to $557/t, just $2/t above the year-to-date low seen in late October. By contrast, the HRB price in the US saw a $21/t increase during the past two weeks, but remains at a relatively low level of $730/t.

Significant damage from landslides has further delayed the first loading of Russian crude at the new Ust-Luga terminal on the Baltic Sea, Reuters reports. The first 100kt loading at the port had been scheduled for the end of this month, this was then postponed to mid-December, but will now not take place until sometime during 1q12.

Provisional loading programmes point to Nigerian crude oil exports of 1.93 mbpd in January, a 30 kbpd increase from December’s planned shipments, Reuters reports. The slightly higher exports come as a result of increased supply of Qua Iboe crude. January’s volumes remain, however, well below the 2.29 mbpd, a year-to-date high, scheduled for loading in August.

Preliminary October data from the American Iron and Steel Institute show that US steel imports fell for a fifth consecutive month, down 3% month-on-month to 1.9 Mt, the lowest monthly level since February. However, this is still 16% higher than the year-ago level. Total imports for the first ten months of this year reached 21.9 Mt, up 19% year-on-year.

The latest data from Pemex show that Mexican October crude exports averaged 1.38 mbpd in October, a 133 kbpd increase from September and unchanged from the same month in 2010. Crude production of 2.55 mbpd was 64 kbpd higher from September, but 18 kbpd lower yoy.

The price of Chinese wire rod slipped over the week, down by a marginal $7/t or 1% week-on-week to a 3-week high of $687/t on 25 November, according to World Steel Dynamics. The current price is $4/t lower than the year ago level, compared with the year-to-date high of $790/t seen in mid-August.

Indian refineries processed 3.12 mbpd in October, according to government data, a 2.8% decline from a year earlier, and the first monthly yoy decline in eleven months. The drop came amidst heavy maintenance at a number of company’s plants. Essar’s Vadinar refinery was offline for most of the month, having been shut down for expansion work in mid-September. October’s runs were up a modest 20 kbpd from September levels. Government data does not include inputs at Reliance’s second, 580 kb/d, export-based Jamnagar refinery, and is yet to take into account any processing at the new 120 kbpd Bina refinery.

Saudi Arabian crude exports to China increased by 161 kbpd yoy in October, to 1.08 mbpd, customs data reveals. China’s imports from Iran increased by 188 kbpd, to 596 mbpd, with the Middle Eastern country taking second spot in the list of China’s oil providers from Angola. The West African country provided China with 513 kbpd in October, up by 101 kbpd yoy. Eastbound shipments of West African grades have been limited this year by a wide Brent/Dubai spread, making the region’s crudes less profitable for Asian refiners. China’s overall crude imports averaged 4.93 mbpd last month, up 1.05 mbpd yoy.

Canada exported 2.8 Mt of iron ore in September, down 24% month-on-month, but up 3.8% from the year-ago level, according to data from Statistics Canada. Total exports in the 3q11 rose for a second consecutive quarter, up by 15% from 2q11 to 9.2 Mt. The 3q saw a significant annual increase in exports to China (the single largest destination), with an increase of 131% year-on-year to 3.7 Mt, against 2.3 Mt in the 2q11.

Japanese iron ore imports fell for a second consecutive month in October, down 0.9 Mt or 8% on September to 10.6 Mt, compared with 11.2 Mt from the year-ago level, according to trade statistics from the country's Ministry of Finance. The October figure brings total imports in Jan-Oct of this year to 107.2 Mt, some 3.5 Mt (-3%) below the corresponding period last year. Meanwhile, Japan imported 15.0 Mt of coal in October, up 1 Mt month-on-month, slightly above the year-to-date monthly average of 14.7 Mt. Total imports in the first ten months of this year reached 146.1 Mt, compared with 137.6 Mt in the corresponding period last year.

North Sea crude production averaged 3.02 mbpd in October, a 261 kbpd increase from September, but down by 405 kbpd from the same month in 2010. Norwegian output was 178 kbpd higher mom, but 201 kbpd lower yoy, at 1.75 mbpd, whilst UK production rose by 64 kbpd mom, but fell by 192 kbpd yoy, to 1.02 mbpd. The region continues to see structural declines to output, but problems at the Buzzard field further reduced production during the second and third quarters. October saw production at the field stabilise, however, an unexpected shut down in mid-November has forced the cancellation of one December cargo, as well as the deferral of two November and four December stems.

Global crude steel production in October rose 6% annually to 124.0 Mt, according from the World Steel Association. The October production totals bring global steel output in the first ten months of this year to 1,257.6 Mt, some 94.7 Mt (+8%) above the corresponding period last year. Good levels of annual growth were seen in the US (7.3 Mt, up 11.5% year-on-year) and South Korea (+18% y-o-y to a record 6.1 Mt). In contrast, Chinese output slipped to an eight-month low of 54.7 Mt, while production in Taiwan dropped to the lowest monthly level since September last year, at 1.7 Mt. In Europe annual declines were in evidence in Germany (down 4% to 3.7 Mt), Spain (-6% to 1.3 Mt) and Belgium (-15% to 0.6 Mt).

According to China’s Customs Statistics, iron ore imports into China in October from India slumped to just 2.1 Mt in October, the lowest monthly total in recent years. Despite the imposition of the iron ore export ban in Karnataka last year, this still marked a decline of almost 30% year-on-year. Imports from Brazil in the same month remained strong at 12.1 Mt, while shipments of iron ore from Australia declined from September but registered an annual increase of 10% at 22.7 Mt.

Detailed data from Chinese customs shows that the country’s net diesel imports reached 48 kbpd last month, versus zero in September, and net exports of 76 kbpd in October 2010. Lower domestic output growth in recent months has led to an increasing tightness in diesel supply, forcing refiners to cut exports and boost purchases from overseas. October’s net imports are the highest since December last year, when widespread diesel shortages saw net imports of 69 kbpd.

Asia-Pacific buyers will import an average of 1.44 mbpd of West African crude in December, a 110 kbpd decline from this month, and the lowest level since September, Bloomberg reports. Overall Nigerian crude shipments will average 2.18 mbpd next month, with Angolan exports of 1.72 mbpd.

The first scheduled loading at the new Russian Baltic crude terminal of Ust-Luga has been delayed, Reuters reports. The inaugural 100kt shipment was scheduled for 30 November, but issues with a sinking berth will make it impossible for tankers to load. The status of five further cargoes set for December loading is uncertain.

Indian iron ore exports in October fell by 34% year-on-year to 4.6 Mt, according to the Federation of Indian Mineral Industries. Total exports in the first half of fiscal year 2011/12 (April-October) dropped 25% to 35.4 Mt. Exports from western Goa slipped 6% to 19.8 Mt in the same period, while only 5.1 Mt of iron ore came from eastern Orissa’s Paradip port in April-October.

Canadian pipeline operator, Enbridge, have agreed to purchase ConocoPhillips’ 50% stake in the 350 kbpd Cushing – USG Seaway Pipeline, various sources report. The deal, due for completion in December, will allow Enbridge, in cooperation with fellow stakeholder Enterprise, to reverse flows of crude oil through the line. Such a move would help alleviate a glut of crude that has developed at the Oklahoma storage hub amidst rising Canadian and Midwestern output. The reversed line would carry 150 kbpd of crude, beginning in early-2012, before increasing shipments to 400 kbpd by mid-2013.

An increase in refinery output was not enough to prevent further U.S. distillate stockpile draws last week, as exports reached a new weekly record, according to the latest data from the EIA. Exports reached 978 kbpd, up by 69 kbpd from the week before, leading to a further 2.1 MB decline in stocks, which dropped to 133.7 MB. Domestic distillate demand of 4.19 mbpd, took the 13-week average 4.0% higher yoy. A 344 kbpd increase from the week before took U.S. refinery crude inputs to 14.68 mbpd, with overall utilisation rising from 82.6%, to 84.8%, of total capacity. Crude imports were 53 kbpd lower, at 8.57 mbpd. Extra production saw gasoline stocks rise by 1.0 MB, to 205.2 MB, as demand remained subdued. Imports of the product rose by 12 kbpd, to 762 kbpd. .

The world export price for Hot Rolled Band (HRB) fell for a ninth consecutive week to an 11-month low of $635/t at the beginning of November, down by $21/t from two weeks earlier, according to the latest SteelBenchmarker produced by World Steel Dynamics. HRB prices in Europe and the US continued to soften over the same period to $663/t (down $35/t to the lowest level since end-March 2010) and $709/t (down $23/t to an 11-month low) respectively. By contrast, the HRB prices in China saw a small recovery, but remained at a low level, up by $8/t from the year-to-date low seen two weeks ago to $563/t.

Indian state oil companies are set to reduce gasoline prices for the first time in three years, Reuters reports. Prices will be reduced by 1.85 rupees/litre (around ¢4), and then reviewed on a fortnightly basis. The government came under fire after a gasoline price hike, the sixth since June 2010, earlier in November. Oil firms, however, have stated that the decision to reduce prices was made solely on the back of lower global gasoline prices and exchange rate fluctuations.

Coal exports from Canada in the 3q11 rose for the second consecutive quarter, up 0.7 Mt or 9% on 2q11 to 8.9 Mt, according to data from Statistics Canada. This also marks an increase of 1 Mt or 13% year-on-year, with coking coal accounting for 85% of total volume. The 3q11 saw a significant rebound in coking coal exports to Japan (the single largest destination), with an increase of 40% quarter-on-quarter to 2.1 Mt.

According to a statement from the chairman of the Libyan National Oil Company, the country’s crude oil output has now reached 600 kbpd, Platts reports. Around 140 kbpd is being consumed by domestic refineries, with the rest available for export. Production is expected to reach close to 800 kbpd, around half Libya’s pre-crisis output level, by the end of the year. The latest field to recommence production is the giant Elephant field, where output is currently running at 40 kbpd. The NOC sees the field reaching its output capacity of 130 kbpd within the next two weeks.

According to data from the US Department of Commerce, US steam coal exports (ex Canada) in September steadied from the previous month at 2.5 Mt. Total exports in Jan-Sep of this year reached 23.2 Mt, up by a massive of 7.6 Mt or 49% year-on-year. In the first three quarters of this year, 4.4 Mt of US steam coal exports were shipped to South Korea and Japan, compared with the 2.7 Mt in the whole of 2010. By contrast, year-to-date exports to China fell by 50% from the corresponding period last year to 0.6 Mt.