Aug 24, 2021 07:01 AM

Energy Insider: China’s Domestic Oil May Face Biggest Price Drop This Year

Rescuers trying to reach miners trapped inside the Qingshuiying mine in Ningxia.
Rescuers trying to reach miners trapped inside the Qingshuiying mine in Ningxia.

In today’s Caixin energy news wrap: Tianqi’s lithium hydroxide project in Australia to start operation by year-end; merger of Ansteel and Bengang to transform Liaoning’s highly fragmented steel industry; China Molybdenum’s first-half net profit rises 139%; surging global natural gas prices raise concerns over inflation

Tianqi’s lithium hydroxide project in Australia to start operation by year-end

Tianqi Lithium Co. Ltd.’s (002466.SZ) lithium hydroxide project in Kwinana, Western Australia, is expected to start first-phase operation by the end of the year and ramp up to full design capacity of 24,000 tons of battery-grade lithium hydroxide by the fourth quarter of 2022, the company said. Tianqi postponed commissioning of the Kwinana hydroxide plant in March 2020, citing liquidity problems amid falling lithium prices and budget overruns at the plant. Lithium prices are up sharply in 2021 on resurgent demand.

Ningxia summons subordinate departments that fail to meet energy targets

The Ningxia Development and Reform Commission summoned the heads of four subordinate departments and five enterprises that failed to curb energy use and contributed the most to the region’s energy consumption. Four areas that were graded as “first-level pre-warning” under China’s “pre-warning” system accounted for 88% of the region’s energy consumption increase. China has used traffic-light colors to rate local governments’ energy-control performance this year. Red – or “first-level pre-warning” – indicates that a region’s energy consumption was more than 10% higher than its target.

Four miners rescued after roof collapses in Ningxia

Four miners were rescued and rushed to a hospital Sunday night after a roof collapse trapped them inside a mine at around 11:50 p.m. Thursday at the Qingshuiying mine in Northwest China's Ningxia Hui Autonomous Region. The mine belongs to Ningxia Coal of China Energy Investment Corp.

China’s domestic oil may face the biggest price drop this year

China may cut oil prices for a third time this year in probably the biggest drop since the beginning of the year amid the opening of the domestic refined oil price adjustment window Monday, according to estimates by multiple institutions. Oil prices have retreated as the spread of the delta variant of the coronavirus fueled fears that a new wave of restrictions will hurt demand. Both Brent crude futures and West Texas Intermediate (WTI) crude futures marked their biggest week of losses last week since May, with Brent dropping 8% and WTI about 9%. Oil prices rebounded from a seven-day drop Monday.

Merger of Ansteel and Bengang to transform Liaoning’s fragmented steel industry

Two major Chinese steelmakers, Ansteel and Bengang Group, formally began merging their operations Friday. The merger will promote high-quality development and foster a new paradigm for the steel industry, according to He Wenbo, chairman of the China Iron & Steel Industry Association. China’s steel industry has entered a period of adjustment and upgrade in recent years, with industrial restructuring the major feature. The merger will further optimize resources allocation, create an orderly market competition environment, enhance the ability to cope with risks, and increase the concentration of the current highly fragmented steel industry in Liaoning province, which has a large number of small, less competitive and heavily polluting producers, He said.

China Molybdenum’s first-half net profit rises 139%

China Molybdenum Co. Ltd. (603993.SH) reported 2.4 billion yuan ($369 million) of net profit attributable to equity shareholders in the first half of 2021, up 139 % year-on-year. Revenue jumped 81.5% year-on-year to 84.8 billion yuan, according to the 2021 interim financial report. The company attributed the gains to surging commodity prices.

Penetration of HJT solar panel technology to rise sharply, experts say

Experts said they are optimistic about the development of heterojunction technology (HJT) for solar panels and projected that high-capacity and low-cost mass production will be the best option for future expansion. Over the next five years, the penetration rate of HJT technology will grow rapidly from the current less than 1% to more than 70%, said Liu Chang, the founder of Chinese solar media outlet SOLARZOOM.

China’s national pipeline is basically completed

China's natural gas pipeline network stretched to 110,000 kilometers, of which 46,000 kilometers were been built during the 13th Five-Year Plan, according to the China Natural Gas Development Report 2021 issued Saturday by the National Energy Administration. The national pipeline is basically completed, with the building of four major natural gas import strategic channels completed and connectivity generally realized, according to the report.

Surging global natural gas prices raise concerns over inflation

Global gas prices have been rising aggressively since June, driven by peak demand and the economic rebound from the pandemic. Asian liquefied natural gas prices have jumped sixfold over the past year. European natural gas prices have surged more than 10 times from a record low in May 2020. And U.S. natural gas futures jumped to the highest level in a decade. Runaway natural gas prices worldwide have raised concerns over inflation.

China’s top polysilicon producers report surge in first-half profits

Two of China’s biggest polysilicon manufacturers reported staggering growth in first-half profits, buoyed by a more than doubling of prices and a rebound in demand from solar-panel makers. Xinjiang Daqo New Energy Co. Ltd. (688303.SH), whose shares debuted on Shanghai’s Nasdaq-style STAR Market in July, reported an almost sevenfold increase in net profit attributable to shareholders from a year earlier to 2.16 billion yuan ($332 million). The company’s revenue grew 112% year-on-year to 4.51 billion yuan. Its bigger rival, Tongwei Co. Ltd. (688303.SH), also posted strong earnings growth with profits soaring almost threefold to 2.97 billion yuan year-on-year on revenue of 26.56 billion yuan, a jump of 41.8%.

China installs over 10 gigawatts of new energy storage in first half

China's energy storage industry is experiencing rapid growth thanks to policy stimulus. Since the beginning of the year, the National Development and Reform Commission and the National Energy Administration issued a series of policies to boost development of the industry. Newly installed energy storage capacity surpassed 10 gigawatts (GW) in the first half of the year, up 600% from a year earlier. The number of large-scale projects reached 34, almost 7.5 times higher compared with a year ago. China set a goal of adding more than 30 GW of new-energy storage capacity by 2025, according to guidelines issued July 23.

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