Industry May 8 to 15

飞雪寒冰

China's crude oil consumption is expected to increase to 8.09 million barrels a day in the second quarter, up from 7.53 barrels in the first three months, according to the latest monthly forecast from the U.S. Energy Information Administration. The administration said in its monthly report that it expects oil consumption in China this year to reach 8.27 million barrels a day in the third quarter and 8.32 million in the fourth quarter. The increase in consumption in the second quarter could be a sign of economic recovery.



Chinese shipbuilders are likely to see more order cancellations, especially for bulk carriers, as weak global trade continues to depress the industry. According to the Ministry of Industry and Information Technology, from October 2008 to February this year, 110 shipbuilding orders totaling 274 million deadweight tons were canceled, accounting for 1.4 percent of total orders. Chinese investment bank, China International Capital Corp., forecasted that the shipping market would remain in the doldrums for the next two years.

飞雪寒冰

The Chinese government is putting together a list of iron and steel plants that will be closed to curb overcapacity in the industry, according to an official at the National Development and Reform Commission. The official told Caijing that the government will also impose penalties on local authorities who fail to enforce the closures. Central and local governments will draw a fund to provide incentives and compensate companies for reduced capacity. In June, the government will also impose further restrictions on financing for outdated mills.



China's State Council on May 11 released the details of the stimulus plan for the nonferrous metals industry, aiming to eliminate outdated smelting capacity, increase the domestic supply quota and push for consolidation. Under the plan, the central government will cut 300,000 tons of copper smelting capacity, 600,000 tons of lead and 400,000 tons of zinc this year, while a total of 800,000 tons of alumina capacity will be removed by the end of 2010. It also plans to consolidate the industry into three to five metals companies through mergers and acquisitions by 2011.