Nov 02, 2021 05:38 AM

Energy Insider: China Expands Diesel Supply to Ease Shortage


In today’s Caixin energy news wrap: China vows to ease diesel shortage through various measures; coal stockpiles at power plants increase as production expands; new technology is available to produce animal feed from industrial gas.

China tells state refiners to expand diesel output

The National Development and Reform Commission (NDRC) said the state is working with domestic oil giants to increase diesel supplies through various measures to ease a shortage. In October, China National Petroleum Corp. (CNPC) supplied 23% more diesel than last year by increasing imports, expanding production and cutting exports. China Petroleum & Chemical Corp. (Sinopec) is also working at full capacity and is projected to produce 50% more diesel compared with the January-August average.

China’s diesel exports decline amid domestic shortfall

China’s exports of diesel declined 34.99% from a year ago to 776,600 tons in September as the country struggles with a domestic shortage of the fuel, according to energy-market information provider JLC. Diesel exports are likely to continue declining in October as the domestic supply remains tight, JLC said. Many Chinese gas stations have started rationing diesel supplies amid surging costs and falling supplies of the fuel used for heating, generating electricity and powering cars and trucks.

China’s economy weakens as power crunch, Covid rules hurt

China’s economy showed signs of further weakness in October as power shortages and surging commodity prices weighed on manufacturing, while strict Covid controls put a brake on holiday spending. The official manufacturing purchasing managers’ index fell to 49.2, the National Bureau of Statistics said Sunday, the second month the reading was below 50, signaling contraction. The nonmanufacturing gauge, which measures activity in the construction and services sectors, dropped to 52.4, missing the consensus forecast. The PMI readings show that the economy is under pressure from both the supply and the demand side.

Coal stockpiles at power plants rebound amid production expansion

China ramped up coal production to 11.5 million tons a day since mid-October to increase supply and bring down prices, the National Development and Reform Commission said Sunday. Coal prices fell eight consecutive days and dropped below 1,500 yuan ($234) per ton, easing pressure on power generators. Coal stockpiles rebounded at major power plants. Inventories at plants in Northeast China, the worst-hit region in the power crunch since September, nearly doubled in October, enough to support 32 days of operation. Total coal inventories at power plants are expected to exceed 110 million tons in three days.

Bus manufacturers speed up electrification to boost growth

Bus sales declined in China this year, forcing major manufacturers to speed up the transformation to electric vehicles as a new growth driver. Major traded bus manufacturers King Long United Automotive Industry Co. Ltd., Zhongtong Bus Holding Co. Ltd. and Yaxing Coach all reported losses of more than 100 million yuan ($15.6 million) in the first three quarters as sales fell. Some of the companies are seeking new growth by making electric vehicles. Several bus makers revealed plans to build battery-powered trucks.

China maintains curbs on steel production

China will continue to strictly control steel production to address overcapacity, National Development and Reform Commission official Xia Nong said Sunday at a special steel industry forum. The official also encouraged the consolidation of special steel companies.

Tesla reportedly places battery order with CATL

Chinese news site 36Kr reported that Tesla ordered 45 gigawatt-hours (GWh) of lithium iron phosphate batteries from Contemporary Amperex Technology Co. Ltd. (CATL), citing unidentified sources. Neither company confirmed the deal. The news came after reports that Tesla secured a $4.2 billion deal to sell cars to leading rental company Hertz Corp.

China makes breakthrough in producing animal feed from industrial gas

Chinese scientists said they found a way to create animal feed from carbon monoxide on an industrial scale, a technology that will reduce the country’s dependence on imported soybeans. The process uses tail gas containing carbon monoxide and dioxide to create a synthesized cell protein called Clostridium autoethanogenum, according to a research team from Beijing Shoulang Biological Technology and the Chinese Academy of Agricultural Sciences’ Feed Research Institute. The technique is already industrially feasible, the team said.

Contact editors Han Wei ( and Bob Simison (

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

You've accessed an article available only to subscribers
Share this article
Open WeChat and scan the QR code