Caixin
Nov 16, 2021 06:01 AM
ENERGY INSIDER

Energy Insider: Steel Prices Plunge in China Amid Weak Demand

A steel plant in Rizhao, Shandong province.
A steel plant in Rizhao, Shandong province.

In today’s Caixin energy news wrap: Hebei tightens steel output limits to meet carbon reduction goal; CNOOC seeks to raise $5.49 billion in sale of A-shares; CATL to invest in battery material unit of Yongtai Technology; industry group expects coal prices to ease in winter

Steel prices plunge in China amid weak demand

Steel prices slid to 4,249 yuan ($666) per ton in China, down 27% from mid-October. Stockpiles rose to 12.8 million tons. At an industrial forum, Luo Tiejun, vice chairman of the China Iron and Steel Association, attributed the slump to weaker demand from the real estate sector, which is hobbled by debt issues, and vehicle manufacturers, which are hindered by a chip shortage. Luo projected a further drop in steel profits in the fourth quarter.

Hebei tightens steel output limits to meet carbon reduction goal

China’s main steel-producing province Hebei announced a plan to stagger steel production starting Monday to accomplish a 30% cut in production this year. The measures, which will last until March next year, will also serve to offset air pollution emitted during the winter heating season. China is determined to cut crude steel production this year even after output rose 12% in the first half.

CNOOC seeks to raise $5.49 billion in sale of A-shares

China National Offshore Oil Corp. (CNOOC) aims to raise 35 billion yuan ($5.48 billion) by selling A-shares in China after it was delisted in New York Stock Exchange under a U.S. blacklist. The petroleum giant said its application is being processed by the China Securities Regulatory Commission.

CATL to invest in battery material unit of Yongtai Technology

Zhejiang Yongtai Technology Co. Ltd. said Contemporary Amperex Technology Co. Ltd. (CATL) plans to buy 25% of Yongtai’s lithium-producing subsidiary from a shareholder for 500 million yuan ($78.4 million). Yongtai agreed to waive its preemption right for the stake. The subsidiary is involved mainly in lithium battery materials. Yongtai said the deal will deepen its cooperation with customers in the lithium battery business.

Industry group expects coal prices to ease in winter

The China Coal Transportation and Distribution Association projected that coal prices would ease ahead of winter and next spring. Booming coal demand for heating will be covered by rising supply after the central government cranked up production, the industry group said.

Daqin railway delivered 16 million tons of coal in November

Datong-Qinhuangdao Railway, the major coal line linking Datong city and eastern China’s Qinhuangdao Port, delivered more than 16 million tons of coal this month through Saturday, the government-run Xinhua News Agency reported. Stockpiles at three main ports for coal transportation in Hebei province rose nearly 3 million tons from October to 19 million tons.

China secures 175 billion cubic meters of gas ahead of winter

China Petroleum & Chemical Corp. (Sinopec) plans to provide 10 billion cubic meters of natural gas to seven northern China provinces, 20% more than last year, a senior company executive said. Amid surging global prices, China urged major producers to secure gas supply by expanding production and storage as well as increasing imports. It secured 175 billion cubic meters of gas.

CNPC unit’s gas production tops 30 billion cubic meters

Gas production of PetroChina Southwest Oil and Gasfield Co., a subsidiary of China National Petroleum Corp. (CNPC), topped 30 billion cubic meters so far this year, up 11.1% year-on-year. Annual production is expected to reach 35.3 billion cubic meters.

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