Oil & Gas

  • Natural gas consumers in China will be allowed to negotiate prices directly with suppliers rather than purchase from pipeline operators, the China Securities Journal reported. Sinopec-owned Xinjiang-Guangdong-Zhejiang Pipeline is expected to become China's first natural gas pipeline sending gas directly to users.
  • China's crude oil imports rose 5.4% year on year to 211.29 million tons in the first 9 months, according to customs figures.
  • China's refined oil imports rose 5.2% year on year to 30.46 million tons in the first 9 months, according to customs figures.
  • China overtook the US as the world's largest oil importer in September, according to the US Energy Information Administration. The gap between domestic production and imports of crude oil was 6.3 million barrels/day in China in September, compared with 6.24 million barrels/day in the US. It is estimated that China will import 300 million tons of crude oil in 2013, accounting for 60% of consumption.

Cement

  • China's nationwide cement price rose by 1.9% week on week in the week through October 13 as leading regional producers lifted prices on stronger demand in the peak season of construction, Daiwa Capital Markets said in its China Cement Weekly report. Some producers in Hebei and Anhui provinces were told to suspend production for controlling air pollution.
  • The State Council said it will phase out the use of low-end P.C 32.5 cement, whose capacity makes up 55% of China's total cement capacity of 2.96 billion tons. DBS argued the upgrade will help cut overall capacity by 173 million tons to 1.45 billion tons per year, or 5.8% of the country's annual output.
  • The recently released guidelines for curbing severe excess capacity of cement and other building materials are more detailed, executable and market driven, UBS noted in its Morning Expresso Asia report. UBS expects the guidelines to improve cement supply and demand dynamics and to benefit industry consolidators.
  • Strong momentum continued in September in China's cement market and was more positive than the rest of the materials sector whose sentiment moderated, according to Macquarie Group. Producers were more optimistic, especially in central and southern China, driven by more orders from commercial real estate and urban infrastructure construction.

Other Commodities

  • China will likely import 3 to 5 million tons of wheat in 2013/14, Cofco president Yu Xubo predicted. Cofco is a leading Chinese grain producer and trader. Yu's forecast is well below others that put China's annual wheat imports at 10 million tons for 2013/14 in the wake of natural disasters.
  • China imported 201,300 tons of cotton at $2,196/ton in September, down 23.4% and down 6.8% respectively from a year earlier, the China Cotton Association said. In the first 9 months, cotton imports fell 19.9% year on year to 3.23 million tons.
  • China's copper imports fell 10% year on year to 3.26 million tons in the first 9 months, according to customs figures.
  • China's aluminum imports fell 30% year on year to 651,598 tons in the first 9 months, according to customs figures.
  • China's soybean imports rose 3.3% year on year to 45.75 million tons in the first 9 months, according to customs figures.

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