Business

China generated about 1.64 trillion kwh electricity in the first half of this year, according to the Country’s economic planner on Sunday.

The figure represented a decline of 1.7 percent over the same period last year, compared with a growth rate of 12.9 percent in the same period last year, said the National Development and Reform Commission (NDRC) in a report on its website.

As a result of economic growth slowdown, power consumption of the whole society down 2.24 percent in the first half over the same period last year. Industry power consumption alone dropped 5.9 percent year on year.

The NDRC figures also showed, China’s power industry saw profits stand at 19.1 billion yuan (US$2.80 billion) in the first five months, up 12.5 percent over the same period last year.

(Xinhua News Agency July 27, 2009)

China’s coal production continued to ease in the first half of this year on flat domestic demand amid the economic slowdown.

The crude coal output increased 8.7 percent year on year to 1.36 billion tonnes in the first six months, but 6.1 percentage points lower than the same period a year ago, data released by the National Development and Reform Commission (NDRC) has shown.

The industry reaped a revenue of 67.8 billion yuan through Jan-May, up 4.2 percent year on year, but the growth rate was almost half of the figure for the first two months.

The coal inventory at the northern China’s Qinghuangdao port, a major Chinese port, was 6.47 million tonnes at the end of June, up 730,000 tonnes from the beginning of the year.

The thermal coal reserve remained at normal level, with 33.08 million tonnes in storage, up 11.34 million tonnes year on year, according to the NDRC data.

But there are also signs that the demand is gradually recovering as customs figure has shown China’s net coal import was 36.60 million tonnes in the first half, which is in contrast with a net export of 3.94 million tonnes a year earlier.

(Xinhua News Agency July 26, 2009)

China National Offshore Oil Corp (CNOOC), the country’s third largest oil company, has won oil product wholesale licenses, as the government opens the sector to greater competition.

With the licenses, the Beijing-based CNOOC will be able to sell products to other oil companies. The company is China’s leading offshore oil and gas producer but a newcomer to the refining and fuel sales sectors.

Analysts said the new refined oil wholesale licenses would facilitate CNOOC to sell products from its Huizhou refinery in southern Guangdong province and from smaller refineries it had acquired previously.

But as CNOOC now still plays a small role in domestic refined oil market, the move will not have any big impact on China’s two oil majors, PetroChina and Sinopec, they said.

According to the Ministry of Commerce, now among the companies that have oil product wholesale licenses, around three fourths are owned by PetroChina and Sinopec.

CNOOC earlier started its Huizhou refinery in Guangdong province. The project, which can process 12 million tons of crude oil annually, was CNOOC’s first refinery in China.

The company has also charted plans to further expand its new Huizhou oil refinery. It has signed a frame contract with the local government, under which it is expected to boost the capacity of the refinery to 22 million tons per year from the present 12 million during the 12th Five-Year Plan period (2011-15).

The Huizhou project is in the Pearl River Delta, one of China’s economic powerhouses. CNOOC has been focusing on the region to develop its downstream business, sources with the company told China Daily on Friday.

Fu Chengyu, president of CNOOC, had said earlier that the company would invest more than 300 billion yuan ($43.91 billion) in the southern Guangdong province over the next five years.

The investment will mainly go towards development of oil and gas fields in the South China Sea, construction of petrochemical projects in Huizhou, and the building of a natural gas pipeline in the region, said Fu.

Guangdong is a key base for CNOOC’s future development, said Fu. The company has invested over 120 billion yuan in the province, and in 2008 alone, it invested 33 billion yuan in the region.

A regulation, issued in December 2006, allows qualified domestic and foreign companies to sell crude and fuel in the world’s second-biggest energy-consuming nation. The move is part of China’s efforts to open up its market to meet obligations under the World Trade Organization, which the country joined in December 2001.

(China Daily July 25, 2009)

China’s daily power generation in the second 10-day period rose 8.5 percent year on year, an big increase over the first ten days of the month, according to the latest figures from the power dispatch center of State Grid Corporation of China on Thursday.

The growth rate was three percent from a year ago in the first 10 days of July.

Wang Wei, analyst at the Guotai Junan Securities, attribute the big growth mainly to high temperature in the southern region and areas along the Yangtze River.

For example, Shanghai saw a rebound of power generation of 2.1 percent from a year earlier in mid-July from the 19.1 percent decline in the first ten days. Power generation in Zhejiang Province climbed 9.8 percent in the the day period from the 8.3 percent drop in the first ten days.

Analysts said growth of power generation would gradually become stable and continue to rise till the end of this year, boosted by the ongoing recovery of industrial production.

Power consumption and generation resumed growth in June, putting an end to eight consecutive months of decline since last October.

(Xinhua News Agency July 24, 2009)

China’s two oil majors will see robust growth in earnings this year, chiefly due to the new oil pricing system and more stable crude prices, analysts said.

When their interim reports for the half-year are released, PetroChina and Sinopec are expected to perform better, especially in their refining businesses, than during the same period last year, they said.

International crude oil prices will have the biggest impact on the two companies’ business performance, but other factors, such as domestic refined oil prices and windfall taxes will also play a role, said Liu Gu, analyst, Guotai Jun’an Securities.

China’s stimulus package for the petrochemical industry will also give the two companies a boost, Liu added.

According to Gordon Kwan with Mirae Assets, PetroChina is expected to see profits of 8 billion yuan in the first half. The company earlier said its refining business made record high profits in the period since it was listed, without providing details.

As for Sinopec, the country’s largest refiner, it would see over 100-percent growth in profit this year, said Liu.

According to the National Development and Reform Commission, China’s refineries made a combined profit of 45.4 billion yuan in the first five months, compared with a loss of 57.2 billion yuan in the same period last year.

(China Daily July 24, 2009)

China’s crude oil output hit 93.49 million tons in the first half, a decrease of 1 percent year on year, according to the country’s economic planner on Thursday.

China’s crude oil output hit 190 mln tons in 2008 China’s refineries processed 175.13 million tons of crude oil in the first half, up 1.5 percent from the same period last year, the National Development and Reform Commission said in a report on its website.

Gas production reached 42 billion cubic meters, an increase of 7.6 percent year on year. The growth rate was 9.7 percentage points lower than the same period last year.

In the first five months, China’s petroleum and petrochemical industry reported profits of 94.7 billion yuan (US$13.9 billion), down 35.4 percent over the same period last year, according to the report.

Oil and gas exploration industry saw profits drop 75.8 percent from a year earlier to stand at 49.4 billion yuan in the first half.

(Xinhua News Agency July 23, 2009)

China National Offshore Oil Corp and South Korea’s LG Chem Ltd will build a US$370-million petrochemical plant in south China.

They agreed to form an equally-owned joint venture for the plant to produce acrylonitrile butadiene styrene, or ABS, in Huizhou, Guangdong Province, LG Chem said yesterday.

ABS is a common thermoplastic used to make light, rigid and molded products such as home appliances and automotive parts.

The plant is set to produce initially an output of 150,000 tons a year in 2011 before expanding its production to 300,000 tons per annum by 2013, LG Chem said.

The Seoul-based company aims to generate sales of US$300 million by 2012 and US$600 million by 2014 from the project.

CNOOC would provide the feedstock for the plant from its refinery and naphtha cracker facilities. CNOOC’s first major refinery, a 12-million-ton-a-year plant, started in Huizhou in March.

LG Chem said it would also expand the output of an ABS plant in Ningbo, Zhejiang Province, to 700,000 tons a year from 580,000 tons by 2012.

The new Huizhou plant and the Ningbo expansion would lift LG Chem’s ABS capacity to 1 million tons a year in China and 1.6 million tons overall. The firm also operates a 600,000 ton-a-year ABS plant in South Korea.

Beijing-based CNOOC is the parent of Hong Kong-listed CNOOC Ltd, the nation’s top offshore oil and gas producer.

(Shanghai Daily July 22, 2009)

The Chinese government started a pilot program on Tuesday to provide subsidies to solar-power projects to boost the solar industry as a new growth point for the country’s economy.

The Ministry of Finance said on its Web site that it will offer 50 percent of investments for solar power projects of more than 500 megawatts and the transmission and distribution network over the next two-to-three years.

The solar power projects in the remote regions will receive subsidies of 70 percent of the investment.

The total generating capacity of such pilot projects in each province should not exceed 20 megawatts, the ministry said.

(Xinhua News Agency July 22, 2009)

China Petroleum and Chemical Corp. (Sinopec), the nation’s largest oil refiner, said Tuesday that it processed 86.9 million tonnes of crude oil in the first half of 2009, up 1.82 percent year-on-year, despite the economic slowdown.

Sinopec reported earlier that the amount of crude oil it refined fell 3.27 percent year on year in the first quarter.

The company, also a leading oil producer, said in a preliminary report that its crude oil output rose 1.18 percent year on year to 149.12 million barrels in the first half of 2009.

Sinopec saw gasoline output rising sharply by 21.01 percent to 16.99 million tonnes in the first half from a year earlier, the company said.

China’s warming economy had contributed to the increases in its rising output, said the company.

China’s gross domestic product (GDP) grew 7.9 percent year on year in the second quarter, after the world’s third largest economy tumbled to 6.1 percent in the first three months, according to the National Bureau of Statistics.

However, Sinopec’s output of certain products still saw decline amid the economic slowdown.

Diesel production fell 5.4 percent from last year’s level to 32.4 million tonnes in the same period, according to the company.

Also in the first half, Sinopec’s natural gas production dropped by 1.12 percent to about 4 billion cubic meters from a year earlier.

Ethylene, synthetic resins, synthetic fibers and synthetic rubbers output declined by 10.1 percent, 4.19 percent, 7.64 percent and 11.09 percent respectively.

Domestic sales of refined oil products declined by 8.42 percent to 57.71 million tonnes.

Sinopec reported its net profit in the first quarter rose 85.1 percent year on year to 11.219 billion yuan (about US$1.64 billion).

The company predicted a more than 50 percent rise in net profit for the first half of 2009 because of lower international crude oil prices and adjustments in refined oil prices on the domestic market.

Listed in Hong Kong, New York, London and Shanghai, Sinopec is the listed subsidiary of China Petrochemical Corporation (Sinopec Group).

Share prices of the company in the mainland A-share market rose by 2.01 percent to 12.16 yuan on Tuesday, but down 0.93 percent in the Hong Kong market to 6.39 Hong Kong dollars.

(Xinhua News Agency July 21, 2009)

Shanghai Electric has started construction on the second phase of its manufacturing base for nuclear equipment in Lingang New City.

The 1-billion-yuan (US$146 million) second phase project will almost double the company’s nuclear equipment manufacturing capacity when it comes on stream in 2012, and Lingang will also become the world’s largest and most concentrated base for nuclear equipment by that time, the company said in a statement.

Shanghai Electric has spent 6 billion yuan in Lingang’s first phase and another nuclear equipment facility in Minhang District.

(Shanghai Daily July 21, 2009)