Aug 31, 2021 07:06 AM

Energy Insider: Sinopec Swings to Profit on Oil Price Rebound

A Sinopec gas station in Shanghai.
A Sinopec gas station in Shanghai.

In today’s Caixin energy news wrap: Energy storage industry is booming in China; Sinopec swings to profit on oil price rebound; Beijing power suppliers seek to break contracts; Ansteel first-half profit surges nearly 10 times; battery giant CATL invests in private equity funds.

Sinopec swings to profit on oil price rebound

China Petroleum & Chemical Corp. (600028.SH), or Sinopec, swung to a net profit of 39 billion yuan ($6 billion) in the first half of 2021, thanks to a rebound in oil prices and an increase in output and sales. The state-owned energy giant reversed a loss of 23 billion yuan a year ago when oil prices plunged and production was shut down amid the Covid-19 pandemic. First-half revenue was up 22.1% to 1.26 trillion yuan, according to an earnings report published Monday on the Shanghai Stock Exchange.

Energy storage industry is booming in China

China’s energy storage industry is booming under several policies issued by the National Development and Reform Commission, the National Energy Administration and some local governments to promote development. Total new-energy storage capacity, including electrochemical storage, flywheel storage, compressed air and supercapacitor storage, surged from 3.28 gigawatts (GW) last year to more than 12 GW in the first eight months, according to Yue Fen, vice chairman of the China Energy Storage Alliance. Industry participants called for more incentives and further overhaul of electricity pricing to foster the market.

Beijing power suppliers seek to break contracts

Several main power suppliers of Beijing, including GD Power Development, Datang Power, Huaneng Group and Jingneng Power, sent a joint letter to the Beijing Municipal Commission of urban management asking to withdraw from electricity purchase contracts for the fourth quarter. According to the statement, coal-based power units in Beijing, Tianjin and Tangshan have been suffering from high coal prices this year, mainly caused by coal shortages. Meanwhile, electricity prices in Beijing dropped, causing financial losses. The companies said they are unlikely to fulfill contracts to supply electricity for Beijing in the fourth quarter. Domestic coal prices remain high even though China released more than 10 million tons of coal from reserves in July.

Ansteel first-half profit surges nearly 10 times

Northeastern China’s Ansteel reported a net profit of 5.2 billion yuan ($801 million) in the first half, up 936.6% from a year earlier. Revenue rose 62.49% to 72.6 billion yuan. The steelmaker cited record high production and rising sales as well as improvements in energy efficiency. The company became the world’s third-largest steelmaker after taking a 51% stake in Bengang Group.

China Zhongwang delays interim financial report

China Zhongwang Holdings Ltd., the world’s second-largest industrial aluminium extrusion product developer and manufacturer, suspended trading Monday and said it would delay publication of its 2021 interim financial report. The company might face a fine as its founder Liu Zhongtian, who was accused of $1.8 billion of tariff evasion, was convicted last week by a U.S. federal jury.

Profit of Qinghai Salt Lake rises 53%

Chinese lithium processor Qinghai Salt Lake Industry Co. Ltd. (000792.SZ) reported a net profit of 2.1 billion yuan ($325 million) in the first half, up 53% from a year earlier, as prices surged for lithium salts and potassium chloride. Revenue dropped 36% to 6.2 billion yuan, mainly due to a decrease in trade income and chemical sales.

Tianqi Lithium back in the black on surging prices

Tianqi Lithium Corp. (002466.SZ), one of the world’s biggest producers of the commodity, recorded its first half-year profit in two years of 85.8 million yuan ($13.3 million), thanks to a jump in sales and prices of the company’s lithium products amid booming battery demand for electric vehicles. The Sichuan-based company recovered from a loss of 697 million yuan in the same period last year, according to an earnings report released Monday on the Shenzhen Stock Exchange. In the six months through June, revenue jumped 25% to 2.4 billion yuan.

Chongqing Iron & Steel’s first-half profit jumps 21 times

Chongqing Iron & Steel Co. Ltd., a listed subsidiary of Baowu Steel, reported skyrocketing first-half earnings as steel prices rose. The company posted a profit of 2.7 billion yuan ($417 million), an increase of 21 times from the same period of 2020. Revenue doubled to 22.7 billion yuan.

Regional carbon-trading market opens to individuals

The local government of Shenyang, capital of northeastern China’s Liaoning province, plans to launch a regional carbon-trading market Sept. 1. Emission allowances and certified emission reductions will be traded on the market, which will be open to companies and individual investors.

World’s first non-cobalt battery package installed in electric car

Chinese battery producer SVolt announced the installation of its non-cobalt battery package in Great Wall Motor Co. Ltd.’s new Ora SUV. The battery — the world’s first such power pack that doesn’t rely on the scarce, toxic metal — has a capacity of 82.5 kilowatt-hours and is expected to support a driving range of more than 600 kilometers for the car.

Battery giant CATL invests in private equity funds

Contemporary Amperex Technology Co. Ltd. (300750.SH) continued investing in private equity funds since April, according to a local media report. The battery manufacturing giant’s investments might aim to foster a robust industry chain for itself, said Wu Hui, general manager of the research department of the Ivy Institute of Economic Research.

Shenhua’s profit surges on coal demand in China

Shenhua Energy (601088.SH), China’s largest state-owned coal mining enterprise, reported a net profit of 26 billion yuan ($4 billion) in the first half, up 26% year-on-year. Revenue rose 37% to 144 billion yuan. The company cited robust domestic coal demand. The company also projected the abatement of coal shortages and a slight decline in coal prices in the second half.

CRRC finds new profit points in wind power and urban rail

CRRC Corp. Ltd. (601766.SH), the world’s largest supplier of rail transit equipment, reported a slight improvement in earnings in the first half amid declining investment in railway fixed assets. Net profit rose 8% to 4 billion yuan ($618 million) and revenues rose 6.8% to 95.5 billion yuan. The wind power and urban rail transit businesses contributed most to earnings.

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