- Sinopec Signs Key Terms Agreement with Kazakhstan for Polyethylene Project
May 22, 2023
BEIJING, May 22, 2023 /PRNewswire/ -- China Petroleum & Chemical Corporation (HKG: 0386, "Sinopec") has signed a key terms agreement with KazMunayGaz, the national operator of the oil and gas industry of Kazakhstan, for developing a polyethylene project in the Atyrau Region on May 18 in Xi'an, China. Sinopec Signs Key Terms Agreement with Kazakhstan for Polyethylene Project (PRNewsfoto/SINOPEC)
The agreement, signed during Kazakh President Kassym-Jomart Tokayev's visit to China, marks that Sinopec will participate in and push forward the project as a cooperative partner. The polyethylene project will be the largest natural gas and chemical project in the region, the investment decision of which is expected to be finalized in 2024, and when Sinopec formally joins the project in the future, all parties will sign an equity acquisition agreement and other legally binding documents of relevance.
Sinopec and KazMunayGaz have been long-term partners with a solid foundation of cooperation, and the signing of the agreement is bringing the partnership to a new level, leveraging Sinopec's leading advantages in engineering, marketing and sales, production, and operation, as well as KazMunayGaz's firm and strong capabilities in the local market and wealth of resources, to promote mutually beneficial cooperation and achieve win-win development.
Sinopec is a listed company on domestic and international stock exchanges with integrated upstream, midstream, and downstream operations, strong oil and petrochemical core businesses, and a complete marketing network. Its parent company, China Petrochemical Corporation, is the largest refining company and the third largest chemical company in the world, with a top 5 ranking on Fortune's Global 500 List.
Headquartered in Astana, KazMunayGaz represents the interests of the Republic of Kazakhstan in the oil and gas industry. Its main business covers oil and gas exploration and exploitation, petroleum processing, oil product sales, storage, pipelines, oil field services, and more.
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For more information, please visit Sinopec. Logo (PRNewsfoto/Sinopec)
SOURCE SINOPEC
- Sinopec Signs Key Terms Agreement with Kazakhstan for Polyethylene Project
May 22, 2023
BEIJING, May 22, 2023 /PRNewswire/ -- China Petroleum & Chemical Corporation (HKG: 0386, "Sinopec") has signed a key terms agreement with KazMunayGaz, the national operator of the oil and gas industry of Kazakhstan, for developing a polyethylene project in the Atyrau Region on May 18 in Xi'an, China. Sinopec Signs Key Terms Agreement with Kazakhstan for Polyethylene Project
The agreement, signed during Kazakh President Kassym-Jomart Tokayev's visit to China, marks that Sinopec will participate in and push forward the project as a cooperative partner. The polyethylene project will be the largest natural gas and chemical project in the region, the investment decision of which is expected to be finalized in 2024, and when Sinopec formally joins the project in the future, all parties will sign an equity acquisition agreement and other legally binding documents of relevance.
Sinopec and KazMunayGaz have been long-term partners with a solid foundation of cooperation, and the signing of the agreement is bringing the partnership to a new level, leveraging Sinopec's leading advantages in engineering, marketing and sales, production, and operation, as well as KazMunayGaz's firm and strong capabilities in the local market and wealth of resources, to promote mutually beneficial cooperation and achieve win-win development.
Sinopec is a listed company on domestic and international stock exchanges with integrated upstream, midstream, and downstream operations, strong oil and petrochemical core businesses, and a complete marketing network. Its parent company, China Petrochemical Corporation, is the largest refining company and the third largest chemical company in the world, with a top 5 ranking on Fortune's Global 500 List.
Headquartered in Astana, KazMunayGaz represents the interests of the Republic of Kazakhstan in the oil and gas industry. Its main business covers oil and gas exploration and exploitation, petroleum processing, oil product sales, storage, pipelines, oil field services, and more.
Story continues
For more information, please visit Sinopec. Logo (PRNewsfoto/Sinopec) Cision
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SOURCE SINOPEC
- Japan’s Cheapest Spot LNG in Two Years May Help Ease Inflation
May 19, 2023
(Bloomberg) -- A Japanese utility paid the least for spot liquefied natural gas in more than two years, potentially limiting the impact of electricity rate hikes that threaten to boost inflation.
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Tohoku Electric Power Co. bought a shipment for late July at a rate just below $10 per million British thermal units on Thursday, according to traders with knowledge of the matter. That’s a third of the price it paid for a December cargo of the power-station fuel.
Global LNG prices are plummeting after a mild northern hemisphere winter left utilities with ample stockpiles, a reversal from last year’s energy shortage that triggered a record-breaking rally. Lackluster demand from China is also weighing on prices. Several Japanese utilities are so well supplied they are offering to resell spare shipments on the spot market, according to traders.
The lower cost for the power-station fuel may help partially offset the increase in regulated power tariffs, after they were allowed to rise by 14% to 42% earlier this week. That could offer some relief to policymakers battling a resurgence in consumer prices.
Tenders:
Gail didn’t award a swap tender seeking to purchase an LNG cargo on a DES basis for June 10-14 delivery to the Hazira terminal in India
Co. also didn’t sell an LNG cargo on an FOB basis offered from the Cove Point in the US for July 3 loading Gail expects to get four liquefied natural gas cargoes each in May and June from Germany’s SEFE Marketing and Trading, Chairman Sandeep Kumar Gupta said
Buy tenders:
--With assistance from Ruth Liao and Ann Koh.
(Adds details from last paragraph.)
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- Sinopec Starts the Drilling of Asia's Deepest Oil and Gas Well in Tarim Basin
May 4, 2023
BEIJING, May 4, 2023 /PRNewswire/ -- China Petroleum & Chemical Corporation (HKG: 0386, "Sinopec") has initiated the drilling of Project Deep Earth 1-Yuejin 3-3XC Well ("the Well") on May 1 in the Tarim Basin, Xinjiang Uyghur Autonomous Region. With a design depth of 9,472 meters, it will be the deepest oil and gas well in Asia and a breakthrough of milestone significance in China's ultra-deep oil and gas exploration, which now has world-leading technological and equipment capabilities. Sinopec Starts the Drilling of Asia’s Deepest Oil and Gas Well, Project Deep Earth 1-Yuejin 3-3XC Well, in Tarim Basin.
Located in the Shaya County of Aksu Prefecture by the edge of the Taklamakan Desert, the Well has completed stratigraphic sealing of the upper 1,500 meters in only four to five days. The drilling operation, carried out by Sinopec Oilfield Service Corporation, is estimated to reach the carboniferous strata in 21 days, which will set a new record in the region.
The extensively difficult and challenging drilling operation is also setting a new Asian record for horizontal displacement in ultra-deep drilling. Wells with a depth of over 9,000 meters are defined as ultra-deep wells, which is the most challenging field of oil and gas engineering technology development. The depth of the Well is 624 meters higher than Everest. In addition to the common bottlenecks of complex geological structure and high temperature, pressure, and hydrogen sulfide content, the well has also been designed for a 3,400-meter horizontal drilling distance, which brings up new issues such as difficult casing and the formation of cuttings bed in horizontal depth.
Sinopec Northwest China Petroleum Bureau has innovatively adopted ultra-deep and large displacement technology that accesses the rich oil and gas resources without damaging the wetland natural reserve. Equipped with "a pair of eyes", the high-temperature and high-efficiency directional technique transmits signals from the vertical depth of 7,200 meters enabled by the high-precision drilling measurement and control system.
Story continues
Sinopec aims to launch pilot ultra-deep exploration projects and push the limits of depth through innovation-driven development of deep marine facies geological theory and exploration technologies. Through its self-developed rotary geo-steerable drilling system and the high-temperature and high-pressure logging equipment, Sinopec has achieved leapfrog development of fast drilling in high precision. As of now, the Shunbei oil and gas field of the Shendi-1 Project has 49 oil and gas wells that are deeper than 8,000 meters, and multiple wells have set new Asian records. Logo (PRNewsfoto/Sinopec)
SOURCE SINOPEC
- Profit Slumps at Biggest Chemical Firm Sabic as Inflation Bites
May 4, 2023
(Bloomberg) -- The wofirmld’s most valuable chemicals maker reported worse-than-expected earnings and said the market remained fragile, with demand in China yet to recover strongly and inflation hurting consumers.
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Saudi Basic Industries Corp. made net income of 660 million riyals ($176 million) in the first quarter, down 90% from the same period a year earlier and 16% below the average estimate among analysts surveyed by Bloomberg.
“High inflation and interest rates continue to add to the uncertainty of global demand growth,” Sabic said in a statement. “We expect margins to remain under pressure” in the second quarter.
Sabic is majority owned by Saudi Aramco and has a market valuation of $71 billion, more than that of any other listed chemicals firm.
Its shares fell 0.9% by 11:20 a.m. in Riyadh.
“The whole world expected a recovery in Chinese demand, but there are still issues related to the Asian markets in general,” Chief Executive Officer Abdulrahman Al-Fageeh said to reporters. “We were hopeful about China but the demand is still below expectations. It was said that there would be growth of 5% by the end of the year, but so far there are no indications of that.”
The Riyadh-based company is investing heavily in China. In March, it started operations at a $1.7 billion plastics plant. The joint venture with Sinopec is designed to make 260,000 tons a year of polycarbonates.
Sabic saw profit surge in 2021 and the early part of last year as countries rebounded from the coronavirus pandemic. But the trend’s reversed since the middle of 2022 with central banks tightening monetary policy to combat inflation.
The firm’s income more that doubled from the final three months of 2022, but was still the second-lowest figure since the third quarter of 2020.
Story continues
The company said average sale prices dipped at the start of this year due to falling demand for fertilizers, which came as food commodities from wheat to corn slumped.
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- Sinopec Achieved Good Performance in 2023 Q1 Net Profit Reached RMB 20.7 Billion
Apr 27, 2023
BEIJING, CHINA / ACCESSWIRE / April 27, 2023 / China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company") (HKEX:00386)(SSE:600028) today announced its unaudited first quarterly results for the three months ended 31 March 2023.
Financial Highlights
In accordance with the IFRS, the Company's operating income for the first quarter of 2023 was RMB 791.331 billion, up by 2.59% year on year; the net profit attributable to shareholders of the Company was RMB 20.740 billion; the basic earnings per share were RMB 0.173. In accordance with the CASs, the net profit attributable to equity shareholders of the Company for the first quarter was RMB 20.102 billion; the basic earnings per share were RMB 0.168. The Company maintained sound financial position. The Company achieved high quality operating results. In the first quarter, the Company's oil and gas production reached 124.6 million barrels of oil equivalent, up by 2.6% year on year, with natural gas production reaching 330.47 billion cubic feet, up by 5.3% year on year. The Company processed 62.24 million tonnes of crude oil, and total sales volume of refined oil products was 56.16 million tonnes, up by 10.1% year on year. The ethylene production was 3.347 million tonnes, and the total chemicals sales volume was 20.69 million tonnes.
Operating Review
In the first quarter of 2023, China's economy improved with gross domestic product (GDP) up by 4.5% year on year. The international crude oil prices fluctuated in a wide range and the spot price of Platt's Brent for the first quarter averaged USD81.27 per barrel, down by 19.7% year on year. The domestic demand for refined oil products rebounded rapidly, demand for natural gas maintained growth year on year, and demand for chemical products recovered.
The Company seized the favorable market opportunity, optimized the whole business chain, strengthened the coordination of production and marketing, made great efforts to expand sales, and achieved good performance. In accordance with CASs, net profit attributable to equity shareholders of the Company was RMB 20.102 billion in the first quarter of 2023. In accordance with IFRS, net profit attributable to shareholders of the Company was RMB 20.740 billion in the first quarter of 2023.
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Exploration and Production: The Company intensified efforts in high quality exploration, expanded the scale of profitable production capacity, and made positive progress in maintaining oil production, increasing gas output and reducing cost. In exploration, we focused on expanding resources, increasing reserve and obtaining more exploration licenses, strengthened risk exploration in new regions and areas, and made important breakthroughs of oil and gas exploration in Shunbei, Chuanbei, and Jiyang depression. In development, we accelerated the capacity building of Shunbei and Tahe oilfields, strengthened fine-tuned development of mature oil fields, and sped up capacity building of natural gas in Western Sichuan and Southeast Sichuan. We also optimized the resources structure of LNG to reduce procurement costs, strengthened operation optimization of natural gas business, achieving a constant improvement in the profitability of whole natural gas business chain. In the first quarter, the Company's oil and gas production reached 124.6 million barrels of oil equivalent, up by 2.6% year on year, with natural gas production reaching 330.47 billion cubic feet, up by 5.3% year on year. The exploration and production segment realised an earnings before interest and tax (EBIT) of RMB 13.357 billion.
Exploration and Production Unit Three-month period ended 31 March Changes Oil and gas production million boe 124.60 121.41 2.6 Crude oil production million barrels 69.49 69.07 0.6 China million barrels 61.86 61.60 0.4 Overseas million barrels 7.63 7.47 2.1 Natural gas production billion cubic feet 330.47 313.94 5.3 Realised crude oil price USD/barrel 75.21 89.02 (15.5) Realised natural gas price USD/thousand cubic feet 8.70 8.14 6.9
Conversion:
For domestic production of crude oil, 1 tonne = 7.10 barrels. For overseas production of crude oil, 1 tonne = 7.25 barrels. For production of natural gas, 1 cubic meter = 35.31 cubic feet.
Refining: The Company actively addressed the market changes, vigorously optimized production operation to maximize the overall profits along the business chain. Closely following market changes, we maintained high utilisation rate. We flexibly adjusted the procurement strategies to reduce procurement costs. We optimized the product mix and increased the exports of refined oil products. We also accelerated the construction of world-class refining bases and advanced with structural adjustment projects in an orderly manner. In the first quarter, the Company processed 62.24 million tonnes of crude oil, yielding 37.30 million tonnes of refined oil products. The refining segment realised EBIT of RMB 10.459 billion.
Refining Unit Three-month period ended 31 March Changes
(%) Refinery throughput million tonnes 62.24 64.19 (3.0) Gasoline, diesel and kerosene production million tonnes 37.30 37.36 (0.2) Gasoline million tonnes 15.16 16.48 (8.0) Diesel million tonnes 15.58 15.72 (0.9) Kerosene million tonnes 6.56 5.16 27.1 Light chemical feedstock production million tonnes 10.61 11.79 (10.0) Light product yield % 74.82 74.48 0.34
percentage points Refining yield % 94.88 95.26 (0.38)
percentage points
Note: Including 100% production of domestic joint ventures.
Marketing and Distribution: The Company seized the favorable opportunity arising from the rapid recovery of demand, fully leveraged the advantages of integrated business and marketing network, strengthened resources coordination, made every effort to expand sales volume, and achieved significant improvement of the sales volume and profits. We optimised the sales network of refined oil products, made continuous efforts for the transition to an integrated energy service provider of Petro-Gas-Hydrogen-Power-Services. We continued to improve the quality and profitability for the non-fuel business. In the first quarter, total sales volume of refined oil products was 56.16 million tonnes, up by 10.1% year on year. The marketing and distribution segment realised EBIT of RMB 8.475 billion.
Marketing and Distribution Unit Three-month period
ended 31 March Changes
(%) Total sales volume of refined oil products million tonnes 56.16 51.02 10.1 Total domestic sales volume of refined oil products million tonnes 44.57 41.06 8.5 Retail million tonnes 29.36 27.34 7.4 Direct sales & Distribution million tonnes 15.21 13.72 10.9 Annualized average throughput per station tonnes 3,802 3,559 6.8
Note: The total sales volume of refined oil products includes the amount of trading volume.
Chemicals: Facing severe challenges resulting from the concentrated release of chemical capacity and fierce competition, the Company closely followed the market demand, optimised the structure of feedstock, facilities and products with a profit-driven orientation, maintained high utilisation rate in profitable facilities, increased production of high value-added products such as PV-grade EVA and polybutadiene rubber, and reduced products with no marginal contribution. We actively promoted the construction of advanced capacity. In the first quarter, the ethylene production was 3.347 million tonnes, and the total chemicals sales volume was 20.69 million tonnes, up by 0.2% year on year. The chemicals segment realised EBIT of RMB -3.022 billion.
Chemicals Unit Three-month period ended 31 March Changes
(%) Ethylene thousand tonnes 3,347 3,606 (7.2) Synthetic resin thousand tonnes 4,816 4,867 (1.0) Synthetic rubber thousand tonnes 349 353 (1.1) Monomers and polymers for synthetic fibre thousand tonnes 2,034 2,491 (18.3) Synthetic fibre thousand tonnes 258 286 (9.8)
Note: Including 100% production of domestic joint ventures.
Capital expenditure: In the first quarter, focusing on quality and return of investment, the Company continuously optimised its investment projects, with total capital expenditures of RMB 23.40 billion. The capital expenditures of the exploration and production segment were RMB 14.98 billion, mainly used for the crude oil and gas production capacity construction in Shunbei, Tahe, Western Sichuan and Southeast Sichuan, and construction of the Shengli Shale Oil National Demonstration Zone and storage and transportation facilities of Shandong LNG. The capital expenditures of the refining segment were RMB 4.22 billion, mainly used for the expansion of Zhenhai refinery and structural adjustment of Anqing and Yangzi refineries. The capital expenditures of the marketing and distribution segment were RMB 0.78 billion, mainly used for renovation of the existing stations. The capital expenditures of the chemicals segment were RMB 3.27 billion, mainly used for ethylene projects in Tianjin Nangang and Hainan, Yizheng PTA project, caprolactam relocation project in Baling, and new material projects in Zhenhai and Tianjin, etc. The capital expenditures of the corporate and others were RMB 0.15 billion, mainly used for information technology projects.
Appendix: Principal financial data and indicators
Principal financial data and indicators prepared in accordance with CASs
RMB million Items As of 31
March 2023 As of 31
December 2022
(before adjustment) As of 31
December 2022
(adjusted) Change
(%) Total assets 2,011,153 1,948,640 1,951,121 3.08 Total equity attributable to equity shareholders of the Company 806,963 785,577 788,471 2.35 RMB million Three-month period
ended 31 March
2023 Three-month period
ended 31 March
2022
(before adjustment) Three-month period ended 31 March
2022
(adjusted) Change
(%) Operating income 791,331 771,386 771,386 2.59 Net profit attributable to equity shareholders of the Company 20,102 22,605 22,800 (11.83) Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses 19,716 22,450 22,645 (12.93) Net cash flow used in operating activities (18,397) (46,781) (46,781) - Basic earnings per share (RMB) 0.168 0.187 0.188 (10.64) Diluted earnings per share (RMB) 0.168 0.187 0.188 (10.64) Weighted average return on net assets (%) 2.52 2.88 2.90 (0.38)
percentage
points
Note: In accordance with the requirements of both the Interpretation of Accounting Standards for Business Enterprises No. 16 and the Accounting Standard for Business Enterprises No. 18-Income Taxes, the Company retrospectively adjusted the relevant items of the financial statements.
Extraordinary items During the reporting period (income)/expenses(RMB million) Net gain on disposal of non-current assets (78) Donations 4 Government grants (676) Gains on holding and disposal of various investments (181) Other extraordinary expenses, net 257 Subtotal (674) Tax effect 182 Total (492) Attributable to: Equity shareholders of the Company (386) Minority interests (106)
Principal financial data and indicators prepared in accordance with IFRS
RMB million Items As of 31
March 2023 As of 31
December 2022
(before adjustment) As of 31
December 2022
(adjusted) Change
(%) Total assets 2,011,153 1,948,640 1,951,121 3.08 Total equity attributable to shareholders of the Company 806,099 784,706 787,600 2.35 RMB: million Three-month period ended 31 March
2023 Three-month period
ended 31 March
2022
(before adjustment) Three-month period
ended 31 March
2022
(adjusted) Change
(%) Revenue 791,331 771,386 771,386 2.59 Operating profit 31,090 32,960 32,960 (5.67) Net profit attributable to shareholders of the Company 20,740 23,338 23,533 (11.87) Net cash flow used in operating activities (18,397) (46,781) (46,781) - Basic earnings per share (RMB) 0.173 0.193 0.194 (10.82) Diluted earnings per share (RMB) 0.173 0.193 0.194 (10.82) Return on net assets (%) 2.57 2.94 2.96 (0.39)
percentage
points
Note: In accordance with the requirements of the International Accounting Standards 12, the Company retrospectively adjusted the relevant items of the financial statements.
About Sinopec Corp.
Sinopec Corp. is one of the largest integrated energy and chemical companies in China. Its principal operations include the exploration and production, pipeline transportation and sale of petroleum and natural gas; the production, sale, storage and transportation of refinery products, petrochemical products, coal chemical products, synthetic fibre, and other chemical products; the import and export, including an import and export agency business, of petroleum, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; and research, development and application of technologies and information; hydrogen energy business and related services such as hydrogen production, storage, transportation and sales; battery charging and swapping, solar energy, wind energy and other new energy business and related services.
Disclaimer
This press release includes "forward-looking statements". All statements, other than statements of historical facts that address activities, events or developments that Sinopec Corp. expects or anticipates will or may occur in the future (including but not limited to projections, targets, reserve volume, other estimates and business plans) are forward-looking statements. Sinopec Corp.'s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties, including but not limited to the price fluctuation, possible changes in actual demand, foreign exchange rate, results of oil exploration, estimates of oil and gas reserves, market shares, competition, environmental risks, possible changes to laws, finance and regulations, conditions of the global economy and financial markets, political risks, possible delay of projects, government approval of projects, cost estimates and other factors beyond Sinopec Corp.'s control. In addition, Sinopec Corp. makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements.
Investor Inquiries：
Beijing
Tel：(86 10) 5996 0028
Fax：(86 10) 5996 0386
Email：ir@sinopec.com
Media Inquiries：
Hong Kong
Tel：(852) 2522 1838
Fax：(852) 2521 9955
Email sinopec@prchina.com.hk
SOURCE: China Petroleum & Chemical Corporation
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https://www.accesswire.com/751605/Sinopec-Achieved-Good-Performance-in-2023-Q1-Net-Profit-Reached-RMB-207-Billion
- New Phase of Key China Renewables Push Extends Beyond Deserts
Apr 26, 2023
(Bloomberg) -- China announced a third round of solar and wind energy projects that’ll form part of President Xi Jinping’s vision of boosting the world’s largest renewable power fleet with vast developments across inland deserts and other unpopulated areas.
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A 850-megawatt solar power project near the coast in Binzhou, Shandong, is among the new developments, and is scheduled to begin generating clean electricity next year, according to a local media report.
The next batch of installations will include locations in former oil and gas fields or coal mining areas, adding to sites already under construction in areas like Inner Mongolia, industry outlets reported previously.
Read more: China Offers More Detail on Xi’s Desert Clean Power Mega-Hub
China aims to build about 455 gigawatts of wind and solar power largely in deserted areas, and researchers previously forecast that almost half will be installed before 2025. Authorities said in November that construction is underway on the initial group of projects, while preparations and planning are being carried out for the second batch.
The nation added a record 87.4 gigawatts of solar power in 2022, and is set to install as much as 120 gigawatts more this year, in part as a result of the push to deliver desert projects. Solar topped hydro at the end of last month to become the country’s largest source of renewable power capacity.
The Week’s Diary
Wednesday, April 26
Shanghai auto show, runs through April 27 CCTD’s weekly online briefing on China coal, 15:00 SMM Intl Copper Summit in Yantai, Shandong, day 3 EARNINGS: Anhui Conch, HKEX, Yunnan Energy, Xinjiang Goldwind
Story continues
Thursday, April 27
Shanghai auto show concludes China industrial profits for March, 09:30 EARNINGS: Angang Steel, Baosteel, BYD Co., China Coal, China Oilfield Services, Cnooc, Ganfeng Lithium, Gotion High-Tech, Hesteel, Huayou Cobalt, Longi Green, Maanshan Steel, Metallurgical Corp. of China, Sinopec, Shandong Steel, Tongling Metals, Zijin Mining
Friday, April 28
China weekly iron ore port stockpiles Shanghai exchange weekly commodities inventory, ~15:30 EARNINGS: China Shenhua, China Three Gorges, China Yangtze Power, Cosco Energy, Cosco Holdings, Jinko Solar, Ming Yang Smart Energy, PetroChina, Tianqi Lithium, Trina Solar
Saturday, April 29
Nothing major scheduled
Sunday, April 30
China official PMIs for April, 09:30
On the Wire
Shares of iron ore miners and steelmakers fell as iron ore traded below $100 a ton for the first time since early December, highlighting a frail recovery for China’s commodities demand even during what’s meant to be the busiest construction period of the year.
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- China’s Frigid Weather Sparks Concern About Fruit Crop Damage
Apr 25, 2023
(Bloomberg) -- A cold front has caused temperatures to plunge across northern China, sparking concern about damage to fruit and vegetable crops and driving investors to bet on production losses.
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Apple futures on the Zhengzhou Commodity Exchange have surged about 8% in slightly under two weeks as many regions experienced an abrupt shift from warm to cold weather. Some northern areas even experienced heavy snowfall.
China is one of the top fruit and vegetable producers, accounting for roughly a third of the world’s supply. The agriculture ministry has warned that the sharp drop in temperatures can cause harm to apple trees in the main producing regions of Shaanxi, Shanxi and Xinjiang. It also said yields of fruit trees — such as pears, peaches, citrus and grapes — may be adversely affected.
The cold front is expected to continue, with widespread rain and snow forecast in northern and central regions. While cold fronts are not unusual in April, the current one appears to be lasting longer with heavier rainfall than usual.
This is making traders and investors bullish. Chinese apple futures, listed in 2017, are popular with speculators. Right now the market is fervently betting on the drop in temperatures and potential output cuts, according to Wang Xiaoyang, a senior analyst with Sinolink Futures.
“Production in Shanxi and Shaanxi has indeed been affected, but apple futures are mainly under the influence of speculative trading,” Wang said.
The cold front is just the latest in a string of wild weather events China has seen in recent months. Yunnan, a key aluminum hub, suffered its driest spell in nearly a decade, just months after Sichuan recorded the worst drought since the 1960s. Sandstorms have been frequent in Beijing since early March.
Story continues
The Week’s Diary
Tuesday, April 25
Shanghai auto show, runs through April 27 SMM Intl Copper Summit in Yantai, Shandong, day 2 EARNINGS: Chalco, CGN Power, Eve Energy, WH Group
Wednesday, April 26
Shanghai auto show, runs through April 27 CCTD’s weekly online briefing on China coal, 15:00 SMM Intl Copper Summit in Yantai, Shandong, day 3 EARNINGS: Anhui Conch, HKEX, Yunnan Energy, Xinjiang Goldwind
Thursday, April 27
Shanghai auto show concludes China industrial profits for March, 09:30 EARNINGS: Angang Steel, Baosteel, BYD Co., China Coal, China Oilfield Services, Cnooc, Ganfeng Lithium, Gotion High-Tech, Hesteel, Huayou Cobalt, Longi Green, Maanshan Steel, Metallurgical Corp. of China, Sinopec, Shandong Steel, Tongling Metals, Zijin Mining
Friday, April 28
China weekly iron ore port stockpiles Shanghai exchange weekly commodities inventory, ~15:30 EARNINGS: China Shenhua, China Three Gorges, China Yangtze Power, Cosco Energy, Cosco Holdings, Jinko Solar, Ming Yang Smart Energy, PetroChina, Tianqi Lithium, Trina Solar
Saturday, April 29
Nothing major scheduled
Sunday, April 30
China official PMIs for April, 09:30
On the Wire
With China’s economic recovery well on track, top leaders will likely turn their policy focus now to boosting business confidence, increasing jobs and strengthening the property market without adding extra stimulus.
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- China Strikes Energy Deals as Its Clout Grows in Middle East
Apr 21, 2023
For years, China has bought oil and gas from the Middle East. Now, Chinese companies are making big investments in parts of the energy infrastructure.
- Sinopec to Take 1.25 Percent Shares in Qatar's North Field East LNG Expansion Project
Apr 13, 2023
DOHA, Qatar, April 13, 2023 /PRNewswire/ -- China Petroleum & Chemical Corporation (HKG: 0386, "Sinopec") has signed an equity participation agreement with QatarEnergy on April 12 to take 1.25 percent shares in Qatar's North Field East (NFE) expansion project, which is currently the largest Liquefied Natural Gas (LNG) project in the world. Sinopec to Take 1.25 Percent Shares in Qatar’s North Field East LNG Expansion Project. (PRNewsfoto/SINOPEC)
The event marks another milestone after Sinopec and QatarEnergy inked a 27-year long-term LNG purchase and sales agreement in November 2022 for the annual supply of 4 million tons of LNG to Sinopec and achieves integrated cooperation on the NFE expansion project.
Sinopec Chairman Ma Yongsheng and Qatari Minister of State for Energy Affairs, President and CEO of QatarEnergy, H.E. Saad Sherida Al-Kaabi, formally signed the agreement at a signing ceremony in QatarEnergy's headquarter in Doha.
"QatarEnergy, a world-leading LNG producer, is one of Sinopec's most important partners, the cooperation between the two companies will further strengthen the optimization of China's energy consumption pattern and improve the security, stability, and reliability of clean energy supply. With the solid foundation of our partnership, we hope to explore new LNG collaboration opportunities and expand new grounds for cooperation to achieve mutual benefit and win-win progress," said Ma.
Al-Kaabi expressed that China is one of the world's most important natural gas markets and key market for Qatar's energy products. The equity participation agreement fulfilled QatarEnergy's promise to further deepen relationships with major LNG clients, especially on developing long-term strategic partnerships with world's top clients like Sinopec. Sinopec is the first Asian stakeholder of the NFE project and the event marks a model of Sino-Qatar cooperation.
With a total investment of USD 28.75 billion, the NFE project is projected to increase Qatar's annual LNG export volume from 77 million tons to 110 million tons.
Story continues
Sinopec and QatarEnergy's partnerships will help to meet the demand for natural gas in the Chinese market and continue to advance green low-carbon, safe, and sustainable energy development.
For more information, please visit Sinopec. Logo (PRNewsfoto/Sinopec)
SOURCE SINOPEC
