China Economic Scan - Your daily update on the Chinese economy.
In this edition: China explains new oil pricing mechanism, Chinese copper recyclers to reopen as copper prices recover, Australia approves Ansteel taking a greater stake in Gindalbie, Hang Seng Index Co announces quarterly review, Chinese banking sector releases social responsibility report.
Top 5 headlines
China explains details of new oil pricing mechanism
- The National Development and Reform Commission (NDRC) said China would adjust domestic fuel prices when crude oil prices exceed a daily fluctuation band of 4% for 22 working days in a row.
- The NDRC said refiners would enjoy "normal" profit when crude oil is below US$80 per barrel, and narrower profit margins when crude oil prices rise above US$80 per barrel.
- Fuel prices would not go further up, or only be raised by a small margin, when crude oil prices exceed US$130 per barrel, and fiscal and tax tools would be used to ensure supplies.
China Metal Recyclers Consider Reopening, Association Says
- Zhai Xin, deputy secretary general at the recycled metal department of the China Nonferrous Metals Industry Association, said metal recyclers who shut down in China last year may start to reopen as copper prices recover from their huge drop-off last year.
- China recycled 600,000 metric tons in metal content of domestically sourced copper scrap in 2008, and imported 5.6 million tons in physical weight last year.
- 40% of world copper demand is met by recycling because it’s cheaper to recycle than to extract and process ore, according to the Bureau of International Recycling.
Ansteel gets nod to up stake in Gindalbie
- Anshan Iron and Steel Group (Ansteel) received approval to increase its stake in Australian iron miner Gindalbie Metals up to a new cap of 36.28%
- Australian Treasurer Wayne Swan said "My approval under the Foreign Acquisitions and Takeovers Act 1975 is conditional upon Ansteel supporting the wider development of infrastructure in the Mid-west (of Australia), and maintaining agreed levels of Australian participation in a green fields joint venture in China's Liaoning province,"
- Ansteel is also a 50% JV partner with Gindalbie to develop the A$1.8 billion Karara Iron Ore Project.
China Resources Power to Replace Yue Yuen on Hang Seng Index
- China Resources Power Holdings, a Chinese electricity producer, will replace Yue Yuen Industrial Holdings in the Hang Seng Index.
- Hang Seng Indexes Co. also said in its quarterly review that HSBC would be capped at a weighting of 15% from the current 20%.
- The changes to the 42 constituent index will occur from 8 June 2009.
China's banking sector issues first social responsibility report
- The China Banking Association (CBA) issued its first banking industry social responsibility report.
- Founded in 2000, CBA is an NGO with 81 full members and 37 associate members.
- The report said the banking sector donated 1.01 billion yuan (US$148.09m) in 2008 on public welfare covering education, culture, sports, health, science and environmental protection.
