UPDATE 1-China Dalian Port receives first VLCC after blast

July 30, 2010 By Leave a Comment

300,000-tonne oil berth resumes operations

* Tanker discharging at a pace one third of normal rate

* Slow speed due to temporary pipeline installed after blast (Adds details of first VLCC discharging now)

HONG KONG/BEIJING, July 29 (Reuters) – China’s Dalian Port is receiving the first very large crude carrier nearly two weeks after a pipeline blast that spilled oil into the sea and forced its only 300,000-tonne berth to shut, state media said on Thursday.

The resumption of oil discharging from China-flagged tanker “Yuanshanhu” started at midnight on Wednesday but it would be at a slower pace than before the accident after PetroChina, operator of the Xingang oil terminal, installed a temporary crude line.

A Dalian-based shipping agent told Reuters that the new crude line only allowed 5,000 cubic metres of oil flow each hour. That compares with a normal rate three times as fast, which means further potential delays in offloading arriving vessels or more cargoes being diverted.

“The idea is to lighten up the big tanker first before moving to the nearby smaller berth which can offload about 8,000 cubic metres per hour,” said the shipping official.

The vessel carries Middle Eastern crude for PetroChina’s WEPEC refinery, the 200,000 barrel-per-day plant close to the site of the accident that was forced to cut production and halt fuel exports after the explosion damaged two main pipelines and a crude tank at the port.

Dalian Port (2880.HK) said earlier on Thursday it had resumed operations at all its terminal and ground facilities, including the largest berth of 300,000 dead weight tonnage (dwt), the port said in a filing with the Hong Kong bourse.

Dalian Port also said it would start operating in the near future a super large crude berth, No. 22, designed to handle 450,000 dwt tanker, which will be the country’s largest. (Reporting by Donny Kwok in Hong Kong and Chen Aizhu in Beijing; Editing by Jacqueline Wong)

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China stocks end down, new IPOs weigh

July 28, 2010 By Leave a Comment

July 27 (Reuters) – China’s key stock index closed down half a percent on Tuesday, as expected large initial public offerings (IPOs) weighed on sentiment and analysts said the index was readjusting after six consecutive days of rises.

The Shanghai Composite Index .SSEC ended at 2,575.4, after closing up 0.7 percent on Monday, snapping a rally inspired by confidence that China would maintain stable economic policies.

Large fundraisings, including Agricultural Bank of China’s (601288.SS) hefty IPO, have weighed on the index, while Beijing’s clampdown on the speculative property sector triggered a near 30-percent drop in the index this year, until the recent rebound.

Sentiment was dampened on Tuesday after the China Securities Regulatory Commission said it would review an IPO application for ShanXi Securities, but analysts said new issuances were unlikely to halt market gains substantially.

“After Agricultural Bank’s huge listing, other listings are not likely to unsettle the market much. Today’s fall is because there is a need for some technical adjustment, this is normal,” said Wen Lijun, analyst at Nanjing Securities.

Wen said in the near term the index could extend its recent rally to 2,800 points on optimism that economic policies will remain stable for the rest of the year to bolster growth.

Volume slipped to 85 billion yuan ($12.54 billion) from Monday’s 88 billion yuan. Turnover had picked up significantly in the previous week, with analysts citing the potential for further rises.

Losing Shanghai shares outnumbered gainers 574 to 306. (Reporting by Farah Master; Editing by Jacqueline Wong)

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Seoul shares end lower, weighed by techs

July 28, 2010 By Leave a Comment

July 27 (Reuters) – Seoul shares were mixed on Tuesday after gains in automakers such as Hyundai Motor (005380.KS) were offset by falls in technology stocks such as Hynix (000660.KS) after the index reached a new 2-year high.

The Korea Composite Stock Price Index (KOSPI) ended 0.04 percent lower at 1,768.31 points, after earlier rising as high as 1,778.72 points, a fresh 25-1/2-month closing high. (Reporting by Jungyoun Park; Editing by Jacqueline Wong)

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Not all weak China local-govt loans sure to sour

July 28, 2010 By Leave a Comment

July 27 (Reuters) – Not all the loans to local government financing vehicles that Chinese banks have identified as being at risk of default will in fact turn sour, a source at China’s banking regulator said on Tuesday.

The source, who declined to be identified, was responding to media reports that about 23 percent of the 7.66 trillion yuan ($1.13 trillion) that banks had lent to local governments, mainly to finance infrastructure, could become non-performing. [ID:nTOE66P032]

He said banks could mitigate credit risk by, for example, requiring the borrowers to set aside more collateral.

The estimate of the percentage of loans at risk was based on the banks’ own investigations at the behest of the China Banking Regulatory Commission, the source added. (Reporting by Zhou Xin and Simon Rabinovitch; Writing by Alan Wheatley; Editing by Jacqueline Wong)

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Taiwan stocks end down; Formosa at 2-mth low

July 28, 2010 By Leave a Comment

TAIPEI, July 27 (Reuters) – Taiwan stocks ended down 0.5
percent on Tuesday, led by losses in Formosa Petrochemical
(6505.TW) after the refinery shut down its local refinery complex
following a fire.

The main TAIEX share index closed down 39.44 points
at 7,748.01, as plastic shares .TPLI dropped 2.8 percent, the
biggest losing sector.

Formosa, the region’s fifth-largest refinery, fell 1.8
percent to a two-month closing low.
(Reporting by Faith Hung; Editing by Jacqueline Wong)

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POSCO to keep Aug stainless steel prices at July levels

July 28, 2010 By Leave a Comment

July 27 (Reuters) – South Korea’s POSCO (005490.KS), the world’s No.3 steelmaker, said in a statement on Tuesday that it would maintain prices of major stainless steel products for August at July levels to encourage local market demand.

POSCO last month lowered prices of major stainless steel prices for July to narrow the price gap with imports, setting prices of its hot-rolled stainless steel products at 3.35 million won and cold-rolled products at 3.62 million won. [ID:nTOE65R01A]

“Despite cost burdens, POSCO decided to keep stainless steel prices unchanged from July,” the statement said.

“As the market’s consensus is that prices have hit bottom, we expect demand to recover soon, especially with low inventories at clients.”

The price of nickel MNI3, a key ingredient in stainless steel, on the London Metal Exchange, has strengthened about 5 percent since the beginning of this month to above $20,000 per tonne. (Reporting by Cho Mee-young; Editing by Jacqueline Wong)

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CORRECTED-Formosa Petchem fined in Taiwan over refinery fire

July 28, 2010 By Leave a Comment

TAIPEI, July 27 (Reuters) – A giant Taiwan oil refinery complex operated by Formosa Petrochemicals Corp (6505.TW) was fined T$1 million ($31,000) over a Sunday night fire that closed the facility and dragged down share prices.

Local officials fined the company’s 540,000 barrel-per-day (bpd) Mailiao petrochemicals complex, Taiwan’s largest, after its third fire this year caused the operation to shut down on Monday for an unspecified period. It smouldered on into Tuesday.

They cited human error and hazardous levels of air pollution.

“The county thought it was quite serious and that it was human error, not a freak act of nature,” said Hsieh Yein-rui, air quality director of the central government’s Environmental Protection Administration.

The blaze at a residue desulphurising unit, which did not cause any injuries, is expected to cost Formosa Petrochemicals T$500 million in losses, the firm said.

Shares of the company fell about 1.8 percent in early trade on the Taiwan stock exchange, lagging the broad market that was down about 0.3 percent. ($1=T$32.05) (Reporting by Ralph Jennings; Editing by Jacqueline Wong)

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Greece, Spain bonds good for China -EU trade chief

July 23, 2010 By Leave a Comment

July 22 (Reuters) – China’s purchases of bonds from Greece and Spain are a good investment and will keep their value, European Trade Commissioner Karel De Gucht said on Thursday.

The several hundreds of millions of euros bought pose no risk for China, De Gucht told reporters at a news conference. (Reporting by Farah Master; Writing by Jacqueline Wong; Editing by Edmund Klamann)

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Ford breaks ground on $300 million China plant

July 19, 2010 By Leave a Comment

(Reuters) – Ford Motor (F.N) and its partly-owned Jiangling Motors Corp (000550.SZ) broke ground on Sunday on a $300 million vehicle plant in central China as the partners speed expansion in the world’s largest auto market.

The facility, capable of producing up to 300,000 units annually, will start operation at the end of 2012, the U.S. automaker said in a statement.

Jiangling, 30 percent controlled by Ford, currently operates two plants, with combined capacity of 210,000 units, making JMC and Ford’s Transit models.

Models carrying Ford and JMC nameplates will be made at the new facility, it said.

(Reporting by Fang Yan and Jacqueline Wong; Editing by Ken Wills)

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Ford, Jiangling break ground on $300 mln China plant

July 19, 2010 By Leave a Comment

July 18 (Reuters) – Ford Motor (F.N) and its partly-owned Jiangling Motors Corp (000550.SZ) broke ground on Sunday on a $300 million vehicle plant in central China as the partners speed expansion in the world’s largest auto market.

The facility, capable of producing up to 300,000 units annually, will start operation at the end of 2012, the U.S. automaker said in a statement.

Jiangling, 30 percent controlled by Ford, currently operates two plants, with combined capacity of 210,000 units, making JMC and Ford’s Transit models.

Models carrying Ford and JMC nameplates will be made at the new facility, it said.

(Reporting by Fang Yan and Jacqueline Wong; Editing by Ken Wills)

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China shares end up 0.8 pct, property sector firm

July 15, 2010 By Leave a Comment

July 14 (Reuters) – China’s key stock index ended up 0.8 percent on Wednesday, rebounding from the biggest single-day percentage drop in two weeks the day before, led by construction and property firms on optimism further tightening policies will not be too severe as economic growth slows.

The Shanghai Composite Index .SSEC finished at 2,470.4 points, after closing down 1.6 percent on Tuesday.

Analysts said firmer sentiment will help underpin Agricultural Bank of China’s [ABC.UL] debut in Shanghai on Thursday although investors remained generally cautious.

“Volume was still very thin ahead of AgBank’s listing. That means investors are adopting a cautious stance, awaiting its listing ” said Zheng Weigang, an analyst at Shanghai Securities.

He said that if volume breached 100 billion yuan, discounting turnover from AgBank’s listing, the index may find momentum to rise above the 2,500-point level that has proved a strong resistence.

Volume edged up to 70 billion yuan ($10.34 billion) from Tuesday’s 61 billion yuan.

Real estate stocks, which had slumped on Tuesday after the government said it would continue its clampdown on property speculation, eased from earlier session highs but retained most of their speculative rebound.

China’s stock market, one of the world’s worst performing this year, down nearly 25 percent, has been hard hit by Beijing’s moves to cool the mainland’s real estate fever, with investors closely eyeing any policy moves for new market direction. (Reporting by Chen Yixin and Jacqueline Wong)

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China stocks in biggest percentage fall in 2 weeks

July 14, 2010 By Leave a Comment

July 13 (Reuters) – China’s key stock index ended down 1.6 percent on Tuesday after the government said it would continue to rein in speculation in the country’s red-hot property sector, following recent media reports that had indicated it was relaxing credit controls.

The Shanghai Composite Index .SSEC closed at 2,450.3 points, chalking up its biggest single-day percentage fall in two weeks. It closed up 0.8 percent on Monday, supported by optimism that the government was relaxing property tightening policies.

China’s stock market, one of the world’s worst performing this year, down around 25 percent, has been hard hit by Beijing’s moves to cool the mainland’s real estate fever.

Chinese banks should “strictly implement” existing curbs on loans to multi-home buyers, the China Banking Regulatory Commission (CBRC) said on Tuesday. [ID:nTOE66C004]

“The market has received a blow from this news,” said Zhang Gang, an analyst at Central Securities. “We expect the index will still trade below 2,500 points in the near term.”

Shanghai’s property sub-index .SSEP slumped 3.2 percent. (Reporting by Chen Yixin and Jacqueline Wong)

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S.Korea Woori Bank to sell benchmark-sized bonds -sources

July 14, 2010 By Leave a Comment

July 13 (Reuters) – South Korea’s Woori Bank, a unit of Woori Finance Holdings Co Ltd (053000.KS), plans to sell benchmark-sized 5-1/2-year bonds at around 320 basis points over U.S. Treasuries, sources close to the deal said.

The deal could be priced as early as Tuesday, the sources said.

Bank of America Merrill Lynch (BAC.N), Deutsche Bank (DBKGn.DE), HSBC (HSBA.L) (0005.HK), ING Bank (ING.AS), UBS (UBSN.VX) and Woori Bank Investment and Securities (005940.KS) were hired to manage the deal. (Reporting by Jun Ebias; Editing by Jacqueline Wong)

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Fitch says Japan fiscal consolidation harder now

July 14, 2010 By Leave a Comment

July 13 (Reuters) – Japan’s ruling party’s poor showing at Sunday’s elections will make it more difficult for the country to push through fiscal consolidation and a delay in a credible plan beyond the year-end would increase the risk of a rating downgrade, Fitch ratings said on Tuesday.

Prime Minister Naoto Kan’s ruling coalition suffered a major blow in Sunday’s upper house election, putting his policies to deal with the country’s massive debt at risk. [ID:nTOE66B066]

“If we don’t see a credible plan come through by the end of the year, it will send a negative signal for its rating, adding pressure to the credit rating,” Andrew Colquhoun, Fitch’s sovereign analyst for Japan, told Reuters.

However, Colquhoun said he was not pessimistic about the government’s ability to draw up such a plan.

“The election will make it more difficult for the government to draw up and implement such a plan, but I am not too pessimistic as I do not read the election results as a rejection of fiscal consolidation,” he said.

Fitch has rated Japan’s foreign currency debt AA and its local currency debt at AA-minus, both with a stable outlook. (Reporting by Umesh Desai; Editing by Jacqueline Wong)

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South Korea c.bank sells 91-day MSBs at 2.37 pct

July 13, 2010 By Leave a Comment

July 12 (Reuters) – Following are the results of the South Korean central bank’s auction of 91-day monetary stabilisation bonds (MSBs) on Monday:

Tenor Offer Tendered Awarded Avg rate Previous

(in trillion won) (pct) (July 5)

91-day 1.0 0.64 0.63 2.37 2.24

(Reporting by Kim Yeon-hee; Editing by Jacqueline Wong)

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AgBank IPO lifts core CAR, challenges remain -Moody’s

July 13, 2010 By Leave a Comment

July 12 (Reuters) – Core capital adequacy ratio of Agricultural Bank of China [ABC.UL] is expected to rise beyond 10 percent after collecting more than $22 billion via a dual listing later this week, Moody’s said in a report on Monday.

Funds raised via its potential record-breaking initial public offering will boost the bank’s balance sheet, which had a core capital adequacy ratio of 7.74 at the end of 2009, said Yi Zhang, vice president and senior analyst at Moody’s.

The rating agency last week upgraded AgBank’s stand-alone bank financial strength rating to D- from E+, citing pressure on the bank to improve its disclosure and increase its accountability after becoming public.

“AgBank is uniquely positioned to benefit from China’s efforts to urbanise the country and increase the income level of the rural population, because its traditional strength is a vast and unparalleled branch network in China,” Zhang said.

After the massive fundraising, Beijing-based AgBank, which has more than 320 million customers, still faces challenges in how to bank on its vast network and concerns about its non-performing loans.

“AgBank has yet to formulate and execute effective strategies to capitalise on the macro-trend toward higher rural incomes,” she said.

AgBank is scheduled to start share trade in a Shanghai debut on Thursday and a day later in Hong Kong. (Reporting by Michael Wei and Jacqueline Wong)

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China stocks end up 2.3 pct as cash flow improves

July 10, 2010 By Leave a Comment

July 9 (Reuters) – China’s key stock index closed 2.3 percent higher on Friday as cash tied up by Agricultural Bank of China’s [ABC.UL] mega IPO returned to the market, while institutions bought up banks and property issues.

Dealers attributed the buying of blue chip stocks to window-dressing ahead of the listing of AgBank next week.

Trading remained cautious after a 25 percent market slump this year battered investor confidence, with traders predicting the index may not easily breach the psychologically important 2,500-point barrier.

The Shanghai Composite Index .SSEC closed at 2,471 points, winding up the week with a gain of 3.7 percent and reversing a 6.7 percent loss last week amid the peak of fund demand for AgBank’s stock initial public offering.

The Shanghai portion of AgBank’s IPO had frozen nearly 500 billion yuan ($74 billion) in subscription funds, and the money for failed subscriptions would all be returned by Friday. The bank will be listed in Shanghai and Hong Kong next week.

Despite Friday’s gain, the index is still one of the world’s worst performers so far this year, hit by a slew of negative factors including Beijing’s campaign to cool the property market and worries over a slowdown of China’s economic recovery amid the euro zone debt crisis.

“I believe institutional investors are doing some window-dressing buying ahead of the AgBank listing,” said a senior trader at a major Chinese brokerage. “But the market should pull back late next week after the AgBank listing.”

China State Construction Engineering Co (601668.SS), the country’s top developer and construction firm, was the day’s most active stock, rising 1.9 percent, while Minsheng Bank (600016.SS), another active stock, closed up 2.8 percent. ($1=6.77 yuan) (Reporting by Lu Jianxin and Jacqueline Wong)

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Peugeot, Changan to finalise China JV deal Fri-source

July 10, 2010 By Leave a Comment

July 9 (Reuters) – PSA Peugeot Citroen (PEUP.PA) and the parent of Chongqing Changan Automobile Co (000625.SZ) will finalise a deal on Friday to set up a 50-50 vehicle manufacturing joint venture in China, a source close to the Chinese company said.

The venture will use a Changan subsidiary’s existing facility in south China to make light commercial vehicles and cars, the source told Reuters.

PSA Peugeot Citroen declined to comment when contacted by Reuters. The French automaker also operates a car venture with Dongfeng Motor Group Co (0489.HK). (Reporting by Fang Yan and Jacqueline Wong)

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China majors’ fuel stocks down 3.2 pct in June -source

July 10, 2010 By Leave a Comment

July 9 (Reuters) – Combined inventories of gasoline, diesel and kerosene held by China’s top two oil firms were down around 3.2 percent in June versus May, due to stronger domestic sales, an industry official said on Friday.

Diesel stocks held by Sinopec Corp (0386.HK) and PetroChina (0857.HK) were down a sharp 6.3 percent last month from May, while that of gasoline rose 1.9 percent, said the official with knowledge of the data.

Domestic sales of the three main fuels rose 1.9 percent to about 20.4 million tonnes. (Reporting by Chen Aizhu; Editing by Jacqueline Wong)

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China Kailuan eyes 50 pct more coal output in 2010

July 7, 2010 By Leave a Comment

CHINA, July 6 (Reuters) – China’s coal producer Kailuan Group plans to raise coal output by nearly 20 million tonnes, or 50 percent, to 60 million tonnes this year, a top company official said on Tuesday.

The group produced 40.45 million tonnes of coal in 2009.

Kailuan aims to further increase production to 100 million tonnes by 2015, Chairman Zhang Wenxue told reporters on the sidelines of a McCloskey coal conference.

The parent of Kailuan Energy Chemical (600997.SS) will also increase coal purchases, mainly coking coal, from overseas markets, though the exact volumes are subject to price changes in the second half of the year, Zhang said.

“There will be change in types of imported coal. Imports of hard coking coal will gradually increase,” Zhang said.

He said the company had planned two coal reserve bases along the Bohai Bay with handling capacity of 100 million tonnes per year and construction would start very soon.

“The base at Caofeidian will handle thermal coal, and the one at Jingtang Port to handle coking coal.”

Zhang said the firm has accumulated 4.5 billion tonnes of coal resources in northwestern Xinjiang region, where many other big Chinese firms have also committed huge investments in coal, power, oil and development of other resources. (Reporting by Rujun Shen and Aizhu Chen; Editing by Jacqueline Wong)

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