Caixin
Aug 14, 2021 08:21 AM
ENERGY INSIDER

Energy Insider: China-U.S. Container Shipping Rates Surge; China’s Carbon Market Inks First Cross-Border Deal

In today’s Caixin energy news wrap: Tesla battery supplier CATL plans $9 billion share placement; China’s power consumption rose 12.8% in July; China Energy Engineering wins approval to absorb Gezhouba Group.

China-U.S. container shipping rates hit record high

Container shipping rates from China and Southeast Asia to the U.S. exceeded $20,000 per twenty-foot equivalent unit, according to state broadcaster CCTV, citing the global container freight index. The surge in shipping rates was driven by multiple factors including changes in the calculation method, increasing surcharge fees by major global shipping companies such as Maersk and Mediterranean Shipping, and expansion of China-U.S. trade. China’s trade with the U.S. reached 2.62 trillion yuan ($405 billion) in the first seven months, up 28.9% from a year earlier.

China’s carbon market records its first cross-border deal

Even as trading on China’s national carbon market dwindled away in its first month, one sign of life emerged this week in the form of an unusual cross-border deal for a voluntary form of carbon emission credits. On Aug. 9, an institution and an individual from Hong Kong bought nearly 10,000 tons of China Certified Emission Reductions (CCERs) from an Elion Group solar power project in the Kubuqi Desert, the first cross-border transaction involving CCERs. High-quality CCER trading is critical to the future of China’s carbon market and the transition to zero carbon for society as a whole, the institutional buyer said.

Power consumption rose 12.8% in July

China’s total electricity consumption in July reached 775.8 billion kilowatt-hours (kWh), 12.8% higher than a year ago, bringing the January-July usage increase to 15.6%. The data reflects stable economic recovery and strong demand from households amid extremely hot weather, according to the National Energy Administration. Power consumption by the agricultural sector rose 20% in July to 10.2 billion kWh, while that of the industrial sector grew 9.3% and the service sector, 21.6%. Electricity consumption by residential customers totaled 116.6 billion kWh, up 18.3% year-on-year.

China Energy Engineering wins approval to absorb Gezhouba Group

State-owned China Energy Engineering Co. Ltd. won approval from securities regulators to absorb its wholly owned China Gezhouba Group Co. Ltd. (600068.SH) unit. Gezhouba’s main businesses include engineering construction, industrial manufacturing, investment and operations, and integrated services. In the first half, Gezhouba's newly signed contracts totaled 225.153 billion yuan ($34.8 billion), an increase of 53.72% year-on-year.

Tesla battery supplier CATL plans $8.9 billion share placement

The board of Contemporary Amperex Technology Co. Ltd. (CATL) approved a plan to sell as much as 58.2 billion yuan ($8.9 billion) of shares to expand the battery manufacturing giant’s production amid intensifying competition. Ningde, Fujian-based CATL, the world’s biggest maker of electric-vehicle batteries, will sell the China-listed shares to as many as 35 investors, according to an exchange filing late Thursday. Proceeds will be used for lithium-ion battery projects and new-energy research and to replenish liquidity. Shares in CATL rose as much as 5.6% Friday.

Xintai Natural Gas’s first-half net profit rises 335%–358%

Shanghai-listed Xinjiang Xintai Natural Gas Co. Ltd. (603393.SH) expects to post a net profit of 760 million yuan to 800 million yuan ($117.3 million to $123.5 million) for the first half, a year-on-year increase of 335%–358%, the company said. However, most of the period’s increase reflected one-time gains. The company signed agreements last October with PetroChina Kunlun, a subsidiary of Kunlun Energy, to sell stakes of 49%–51% in 10 affiliates for around 680 million yuan.

Jiu Steel Group Hongxing’s net profit surges on price increases

Gansu-based Chinese steelmaker Jiu Steel Group Hongxing Iron & Steel Co. Ltd. (600307.SH) reported a net profit of 1.95 billion yuan ($301 million) in the first half, swinging from a net loss of 82.88 million yuan a year earlier, on rising steel prices. Revenue rose 66.1% to 26.29 billion yuan.

Chengdu Gas Group’s first-half net profit rises 26.92%

Chengdu Gas Group Co. Ltd. (603053.SH) reported net profit of 320 million yuan ($49.4 million) in the first half, a year-on-year increase of 26.92%, reversing a downward trend of the past two years. The company’s operating revenue totaled 2.33 billion yuan during the period, 14.14% higher than a year earlier, mainly due to an increase in sales of natural gas.

Luoping Zinc & Electricity reports strong first-half profit increase

Yunnan Luoping Zinc & Electricity Co. Ltd. (002114.SZ) posted a net profit of 33.13 million yuan ($5.12 million) in the first half, reversing a net loss of 152 million yuan a year earlier. Revenue rose 88.5% to 994 million yuan. Higher zinc prices during the period spurred higher production, resulting in an increase in profit margin. As of the end of June, prices of zinc were up 3.94% from the beginning of the year.

Coal demand and supply are largely in balance, top economic planner says

With a sustained increase in coal production and easing demand as the summer usage peak comes to an end, current coal market supply and demand are generally in balance, according to the National Development and Reform Commission. China’s power plants consumed 7.2 million tons of coal on Aug.10, 300,000 tons less than in the peak level, while coal supplies for power generations increased to 7.4 million tons, hitting a record high for summer coal supply.

Contact editors Han Wei (weihan@caixin.com) and Bob Simison (bobsimison@caixin.com)

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