Energy Insider: China and Saudi Arabia to Build Mega Petrochemical Complex
In today’s Caixin energy news wrap: NDRC accelerates the release of advanced coal production capacity; China will base new shipbuilding giant in Shanghai; PetroChina swings to profit on strong oil prices; ex-vice president of state-backed Shanghai Electric expelled from Communist Party; China Northern Rare Earth’s first-half net profit rises 501%
China and Saudi Arabia to build mega petrochemical complex
Fujian Petrochemical Industrial Group signed a joint venture contract with Saudi Basic Industries Corp. to build a world-class mega petrochemical complex in Zhangzhou, a city in China’s Southeastern Fujian province. With a total investment of 40 billion yuan ($6.17 billion), the complex is expected to produce 1.5 million tons of ethylene a year and will be equipped with a series of downstream production facilities.
NDRC accelerates the release of advanced coal production capacity
The National Development and Reform Commission (NDRC), China’s top economic planner, said it will promote the continued land use of open-pit coal mines and resumption of normal production as soon as possible to accelerate the release of advanced coal production capacity. A total of 16 open-pit mines in Ordos in North China’s Inner Mongolia autonomous region were recently approved for continued land use, with annual production capacity of 25 million tons. Monthly coal output will increase by more than 7 million tons with the gradual approval of more open-pit mines having a total annual capacity of 50 million tons.
China will base new shipbuilding giant in Shanghai
The merger of China’s two largest state-owned shipbuilding conglomerates, China State Shipbuilding Corp. (CSSC) and China Shipbuilding Industry Corp. (CSIC), entered the substantive operation phase, and the combined group is moving its headquarters to Shanghai. A group of CSSC officials signed a strategic cooperation agreement with the Shanghai’s Huangpu District government Tuesday. Since 2015, Beijing has been pursuing efforts to consolidate the country’s bloated state-owned sector to pare down leverage and increase global competitiveness.
Ex-vice president of state-backed Shanghai Electric expelled from Communist Party
Lü Yachen (吕亚臣), a former vice president of the Shanghai government-backed energy and industrial-equipment maker Shanghai Electric Group Co. Ltd., who retired more than a year earlier, was expelled from the Communist Party over serious violations of party discipline and laws, the CPC Shanghai Committee's discipline inspection commission and supervisory commission said Thursday. An investigation found that Lü breached the party's anti-graft code by accepting gifts and money, taking advantage of his position to seek benefits for others, and embezzled state-owned assets and public funds.
PetroChina swings to profit on strong oil prices
State-owned oil giant PetroChina Co. Ltd. (601857.SH) reported a net profit of 53.04 billion yuan ($8.18 billion) for the first half, reversing a net loss of 30 billion yuan a year earlier, with an average growth of 36.6% over the recent two years. Revenue was up 28.8% to 1.2 trillion yuan. PetroChina said its results were lifted by rising oil and gas prices and a recovery in China’s fuel demand from the pandemic slump. PetroChina said it expects international crude oil prices to remain volatile and China's domestic refined oil-product consumption to continue rising.
Shandong Iron and Steel, Inner Mongolia Baotou Steel Union report profit surges
Two more Chinese steelmakers recorded sharp rebounds in profits for the first half thanks to rising steel prices and increased sales amid the recovery from last year’s pandemic. Shandong Iron and Steel Group Co. Ltd. (600022.SH) reported net profit of 2.1 billion yuan ($324 million) in the first half, up 509% from a year earlier. Revenue rose 46.54% to 58.83 billion yuan. Inner Mongolia Baotou Steel Union Co. Ltd. (600010.SH) reported a 3,188% jump Thursday in first-half net profit attributable to shareholders to 2.76 billion yuan. The company’s revenue grew 41.1% year-on-year to 39.44 billion yuan.
China Northern Rare Earth’s first-half net profit rises 501%
China Northern Rare Earth Group (600111.SH) posted strong earnings growth in the first half with profits soaring fivefold to 2.04 billion yuan ($315 million). The company’s revenue grew 49.5% year-on-year to 14.72 billion yuan. China raised its mining, smelting and separation quotas for the first batch of rare earth minerals to a record level during the reporting period. The new mining quota for the first batch is 84,000 tons, compared with 66,000 tons a year earlier, of which China Northern Rare Earth obtained 44,130 tons. While the total quota for rare earth smelting and separation was set at 81,000 tons, also a 27.6% hike from a year earlier, of which China Northern Rare Earth obtained 47.25%.
Datong Coal’s first-half profit surges on price increases
Datong Coal Industry Co. Ltd. (601001.SH) reported a 209.3% jump in first-half profit, reflecting surging coal prices. The company’s net profit was 1.36 billion yuan ($209 million) in the first half. Revenue rose 38.3% to 7.15 billion yuan.
Daqin Railway’s first-half profit increases on coal market recovery
Daqin Railway Co. Ltd. (601006.SH), operator of China’s busiest coal railway, reported net income of 7.46 billion yuan ($1.15 billion) in the first half, up 35.86% from a year earlier, driven by a rebound in coal demand. Revenue rose 14.9% to 38.61 billion yuan. Daqin railway, which connects the coal mining heartland of Shanxi province to the northern port city of Qinhuangdao, transported 342 million tons of goods in the first half, 12.4% higher than a year earlier.
China Xd Electric first-half net profit rises 107%
China Xd Electric Co. Ltd. (601179.SH) posted net income of 243 million yuan ($37.5 million) for the first half, up 106.8% from a year earlier. The jump was primarily due to an increase in new orders, which rose 40.6% to 10.88 billion yuan. The company also cited delayed deliveries affected by the pandemic during the same period last year.
China Three Gorges Renewables reports 58% first-half profit increase
State-owned China Three Gorges Renewables Co. Ltd. (600905.SH), a unit of the operator of the world’s largest hydroelectric plant, reported a net profit of 3.27 billion yuan ($505 million) for the first half, a year-on-year increase of 57.55%. The company cited an increased number of wind and photovoltaic projects that went into operation and revenue gains from the increased electricity generation.
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