Sharp rise this morning in this Chinese oil refinery company. Tipped over the weekend in Small Company Share Watch to be the next ReneSola. Changes in the way pricing operates since China joined WTO is set to change the company dramatically, plus results in the coming weeks could surprise on the upside.

www.haikechemical.com

Quarter 1 update

First Quarter 2007 Highlights

- Total revenues increased by 28% to US$ (or '$') 73.9m (2006Q1: $57.9m)

- Petrochemical revenues increased by 15% to $56.1m (2006Q1: $48.6m)

- Speciality chemical revenues increased by 87% to $17.0m (2006Q1: $9.1m)

- Biochemical revenues increased by 300% to $0.8m (2006Q1: $0.2m)

- Gross margin improved to 12.1% (2006Q1: 7.2%) to $8.9m (2006Q1: $4.1m)

- Net profit after tax increased by 625% to $5.8m (2006Q1: $0.8m)

- Net profit (after minority interests) increased by 650% to $4.5m
(2006Q1: $0.6m)





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With Turkey hotting up now as well with the PKK issue, things could get exciting on oil prices and perhaps new highs again. All we need now is a good cold winter and we might see the elusive 100$ a barrel, which of course is not good news for the likes of HAIK.


http://money.cnn.com/2007/10/24/markets/oil_eia/index.htm?

Oil surges after surprise inventory drop

Inventory report shows unexpected declines in crude, gasoline, and distillate supplies.

By Keisha Lamothe, CNNMoney.com staff writer
October 24 2007: 3:45 PM EDT

NEW YORK (CNNMoney.com) -- Oil prices rallied Wednesday after a government report showed an unexpected drop in inventories.

U.S. light crude for December delivery settled up $1.83 to $87.10 a barrel on the New York Mercantile Exchange. Oil traded down 22 cents to $85.05 just prior to the report's release, then rose as high as $87.20 before pulling back a little.

In its weekly inventory report, the Energy Information Administration said crude stocks plunged by 5.3 million barrels last week. Analysts were looking for an increase of 300,000 barrels, according to a Dow Jones poll.

"Crude should have been able to maintain a more modest decline, if not some growth," said John Kilduff, an energy analyst at MF Global in New York. "Now there are renewed worries over supplies."

Gasoline supplies fell by 2 million barrels while distillates, used to make heating oil and diesel fuel, slipped by 1.8 million barrels. Analysts were expected gasoline stockpiles to grow by 1.1 million and distillates to rise by 200,000.

"Distillates and gasoline supplies compared to last year are down significantly," Antoine Halff, head of energy research at Fimat in New York.

Refinery activity fell last week by 0.2 percentage point to 87.1 percent of capacity. Analysts ...................................

http://www.resourceinvestor.com/pebble.asp?relid=38972

High Price of Oil is Chinese Petroleum Industry's Biggest Woe

By Terry Wang
21 Dec 2007 at 09:11 AM GMT-05:00


SHANGHAI (Interfax-China) -- The high price of oil is the Chinese petroleum and chemical industry's biggest problem, in addition to over investment and a low number of purchases, the China Petroleum and Chemical Industry Association (CPCIA) said in a report released on Tuesday in Beijing.

According to the report, high oil prices have diminished profit margins. Furthermore, an overabundance of investment, a common phenomenon in China, has caused overcapacity. Meanwhile, too few purchases has led to oversupply.

The report also said that some coal chemical projects can take advantage of these problems to be more competitive.

Some analysts expressed different opinions about the chemical industry's profitability in regards to high oil prices.

Shi Xuesong, a chemical industry analyst with China International Capital Corp., told Interfax that domestic demand for chemical products will be strong in 2008 because of rapid economic development. Downstream petrochemical companies, except for refining companies, can transfer the pressure of high costs to consumers.

But Liu Yanwei, a senior engineer with the China National Petroleum & Chemical Planning Institute, said that some chemical projects, which are fed with oil and gas, will experience additional pressure because of production costs.

"Because of rapid economic growth, the chemical industry will indeed have a large potential and will develop rapidly in coming years," Liu said. "However, the industry's profit margin will go down because of higher production costs."

According to the CPCIA report, China's petroleum and chemical industry's profits for 2007 will reach RMB 500 billion ($67.67 billion), up 20% year-on-year.

Liu said that most of the profits go to the upstream sector of the industry. Some Purified Tetrathalyc Acid (PTA) projects, a part of the downstream sector, have even suspended production recently because of high oil prices, he said.

Liu also said that the rise of chemical product prices do not match increases in production costs, so some downstream companies have had to lower the workload of their projects or carry out maintenance on production facilities, a common practice that forces the closure of facilities when it is unprofitable to operate them.

Liu said that natural gas prices are also very high for industrial users.

The National Development and Reform Commission (NDRC) released a notice in September limiting natural gas utilization in ammonia production and banning new natural gas-based methanol projects, with the intent of giving priority to city gas utilization. "Even if there was no such notice, natural gas prices are already too high to bring companies sufficient profits anyway," Liu said.

Liu agreed with the CPCIA report that coal chemical projects will have an opportunity to become more competitive if oil prices stay at such a high level.

"Coal prices are also increasing, but they will not skyrocket like oil prices. In addition, some alternative energy products, including methanol and dimethyl ether, which are produced from coal, will also have a promising future, since they will have lower production costs compared to gasoline and diesel," he said.

If the local producers refuse to make it at a loss, then import more and pressure the local producers margins even more. Such is the Communist system, the people come first and business last when it comes to emotive subjects like fuel prices, which can ultimately effect the support of the Communist Party, into such a big event as the Olypmics, don't want any riots or rallies provoked by high fuel prices now do we............ ;)


http://www.abcmoney.co.uk/news/262007188800.htm

China to cut import tariff on gasoline, diesel, jet fuel to one pct - UPDATE

Published : Wed, 26 Dec 2007 09:39
By : Agencies

BEIJING (XFN-ASIA) - China will cut import tariff on gasoline, diesel and jet fuel to one pct from the current 2 to 6 pct, from January 1, the Ministry of Finance said.

The import tariff for naphtha will be cut to one pct from the current 2 pct, while the duty on fuel oil will remain at 3 pct, it said.

The ministry also said that export tariff on crude oil will remain at 5 pct.

The move is aimed at curbing oil products exports amid surging domestic demand.

China, the world's second largest energy consumer, has faced fuel shortages since October due to gap between surging international crude prices and domestic state-capped fuel prices.

PetroChina and China Petroleum & Chemical Corp (Sinopec) have been urged to boost fuel imports to ease the supply crunch, although the firms will incur a loss on sales.

China imported 31.15 mln tons of oil products in the 11 months to November, down 9 pct from the same period last year, according to recent data from the Customs.

86p to 141p, not bad for a heap of c***, any chance of popping over to the bxp thread and slagging them off, they pay a nice 15% dividend but the shareprice is in the toilet.

you are more than welcome to your Chinese stocks, but don't come crying if/when all ends in tears ..... i don't see that 205 down to 140 is much to crow about either, even if you were frightfully clever and caught the falling knife at the bottom of the latest plunge!

Whatever your view on Chinese stocks I'm not so sure you're appreciating the growth from the specialty chemicals side of the business with the new plant operational.

it would be a great benefit to the end-users if the Chinese (and to some extent the Indians) started producing quality chemicals to spec! ..... time and time again, the stuff delivered is severely sub-standard and causes all sorts of problems ...... further proof that what looks cheap is often expensive.

the same can be said of their steel

http://www.bloomberg.com/apps/news?pid=20601089&sid=aCD53QGjW9Ec&refer=china

Sinopec Leads Decliners Among Asian Energy Stocks (Update1)

By Wang Ying

March 7 (Bloomberg) -- China Petroleum & Chemical Corp., Asia's biggest refiner, fell in Hong Kong trading and was the worst-performing stock in the MSCI AC Asia Pacific Energy Index on concerns that record crude costs will reduce earnings.

Sinopec, as China Petroleum is known, slumped as much as 8.1 percent to HK$7.53, the biggest drop of the day among the index's 50 members. Oil rose to a record $105.97 a barrel in New York overnight.

``Sinopec will see a drop in first-half profit due to record crude costs and the government's reluctance to raise fuel prices,'' Grace Liu, an oil analyst with Guotai Junan Securities Hong Kong Ltd., said by telephone from the southern city of Shenzhen.

Goldman Sachs Group Inc. cut Sinopec to ``neutral'' from ``buy'' in a research report today after raising its oil-price forecasts. China restricts Sinopec's ability to pass on soaring raw material expenses in a bid to shield the nation's 1.3 billion people from inflation.

The Beijing-based company's loss from turning crude oil bought at record prices into fuels sold under state controls was widest in December, January and February, Zhou Yuan, vice president at parent China Petrochemical Corp., said yesterday.

China Petrochemical will receive a government subsidy to help cover its refining losses, Zhou said in an interview in Beijing. The state will pay ``a certain amount'' to the refiner because the state-owned company has shouldered ``social responsibility'' to ensure fuel supplies.

Price Increase `Improbable'

The listed unit received a 9.42 billion yuan ($1.3 billion) subsidy in 2005 and 5 billion yuan in 2006 to compensate it for soaring raw material costs. Zhou was unable to say whether the latest subsidy will be reflected in Sinopec's financial accounts.

The prospect of China raising fuel prices this year ``is increasingly improbable,'' Goldman analysts including Kelvin Koh said in today's report.

Benchmark New York oil prices have jumped 71 percent in the past 12 months, increasing the bill Sinopec must pay for importing most of its raw material.

PetroChina Lanzhou Petrochemical Co., a unit of the nation's largest oil company, is losing 1 billion yuan a month processing crude because prices for the commodity are above $100 a barrel, a company official said.

Controls on fuel prices to curb inflation mean that the refinery needs crude to cost less than $60 a barrel for its oil processing operation to be profitable, Yu Baocai, Lanzhou Petrochemical's general manager, said today in Beijing. The plant, in Western China's Gansu province, lost 4 billion yuan refining oil last year. The refinery is owned by PetroChina Co.

The future for the "specialist chemical side" also looks full of competiton, more and more competion and suppliers.....

http://www.purchasing.com/article/CA6539321.html

Petrochem capacity expansions coming for China

Shanghai Petrochemical aims to increase production by 450,000 metric tons
By Dave Hannon -- Purchasing, 3/7/2008 8:48:00 AM

If the Chinese government gives the green light, Shanghai Petrochemical will expand its ethylene capacity by 450,000 metric tons. If approved, the total ethylene capacity at an existing unit from 150,000 metrics tons to 600,000.

Shanghai Petrochemical President Rong Guangdao told Reuters recently that Supply and demand of fuels in our country is more or less balanced, but there are shortages of petrochemicals. So we are focused on expanding this output, but to do this you also have to expand your refining capacity."

The move is only the latest in a recent onslaught of capacity expansions and joint ventures aimed at increasing Chinas petrochemical output. Also this week, Chinas biggest chemical refiner Sinopec Group said it would by a 60% stake in Australias AED Oils Puffin and Talbot oilfields in the Timor Sea.

China National Petroleum Corp., the country's largest oil and gas producer by capacity, has signed a memorandum of understanding with a unit of state-owned Qatar Petroleum to set up a petrochemical plant in China with an annual production capacity of 1 million metric tons, reports MarketWatch.

And Saudi Aramco, Saudi Arabia's state-owned oil company, said this week it will take a 50% stake in a $1.8 billion oil refinery that Sinopec is building.

The troubles of costs and losses is known, but the interesting thing, like in the Daqing story, is that they are all getting more into the chemicals side, and expanding the chemcials side. Which can only mean before too long the chemicals side prices will collapse on far too much supply, so they will all be back to square one and struggling with margins and profits again.




http://www.chinatradeinformation.net/china-trade-news/petrochina-unit-refining-loss-is-140-million-a-month.html

PetroChina Unit Refining Loss Is $140 Million a Month

PetroChina Lanzhou Petrochemical Co., a unit of the nations largest oil company, is losing 1 billion yuan ($140 million) a month processing crude because prices for the commodity are above $100 a barrel, a company official said.

Controls on fuel prices to curb inflation mean that the refinery needs crude to cost less than $60 a barrel for its oil processing operation to be profitable, Yu Baocai, Lanzhou Petrochemicals general manager, said today in Beijing. The plant, in Western Chinas Gansu province, lost 4 billion yuan refining oil last year.

Chinas curbs on fuel prices limit the ability of PetroChina Co. and China Petroleum & Chemical Corp., or Sinopec, its two biggest refiners, to pass on the rising cost of crude oil, their main raw material. Sinopecs parent said yesterday there have beenhuge losses at the groups refineries.

Chinas refineries are facing extremely high operational pressures on record crude costs, Grace Liu, an oil analyst with Guotai Junan Securities Hong Kong, said by telephone from the southern city of Shenzhen.

While the plant is losing money processing crude, it posts a profit of about 300 million yuan a month on its petrochemical business, Yu said. Chemical sales help to pare the refinerys monthly loss to about 700 million yuan, he said.

Different to Sinopec

Unlike Sinopec, PetroChinas refining losses can be offset by its profitable upstream business and we still estimate PetroChinas profit will rise in the first half of this year,Liu said.

Benchmark crude oil in New York was at $105.38 a barrel in after-hours electronic trading at 12:04 p.m. Beijing time. Yesterday, futures settled at $105.47, the highest close since trading began in 1983, and earlier touched a record $105.97.

Lanzhou Petrochemical will reduce capacity by between 400,000 and 500,000 metric tons in May for maintenance lasting about a month, Yu said while attending parliamentary sessions in Beijing.

The refinery processed 10.56 million tons of crude oil last year, and will maintain similar volumes in 2008, Yu said. Production of ethylene, a key raw material for plastics, will rise about 3 percent to 700,000 tons.

PetroChina will complete an oil-product pipeline from Lanzhou to Zhengzhou in central Chinas Henan province by end of this year, Yu said. Almost all Lanzhou Petrochemicals oil products could be transported by pipeline next year.

PetroChina Petroleum Sinopec

This entry was posted on Friday, March 7th, 2008 at 10:19 pm and is filed under China Trade News. You can follow any responses to this

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http://news.tradingcharts.com/futures/0/9/106096990.html

Daqing Petrochemical Lost CNY2bn in Oil Refining




DAQING, Mar 14, 2008 (SinoCast via COMTEX) -- PetroChina Daqing Petrochemical Company, an affiliate of the country's oil titan China National Petroleum Corporation (CNPC), suffered a CNY 2 billion loss in its oil refining business in 2007, revealed the general manager, Mr. Yang Jigang.

Currently, the international crude oil prices are on the surge and the Chinese Central Government requires that related companies and institutions should not lift prices of crude oil, natural gas, electric power, as well as public utility recently. Therefore, Daqing Petrochemical, as one of CNPC's key oil refineries, has to face more pressure.

The general manager added that the company had planned not to cut production, with a view to ensuring a stable refined oil supply and narrowing the price inversion. In addition, Daqing Petrochemical wants to produce more high value-added chemicals in the near future, and then further upgrade its profitability.

At the end of 2007, it started creating a 1.2-million-ton ethylene extension project in Daqing, a major oil-refining city in northeast China. With a total investment of CNY 14 billion, this project is regarded as an important part of Daqing City's long-term development scheme.

On June 1, 2007, the National Development and Reform Commission, China's macro-economy regulator, officially allowed Daqing Petrochemical to upgrade its 1.2-million-ton ethylene project, which is forecasted to see its annual ethylene production capacity grow to 1.2 million tons, including existing 600,000 tons.

Meanwhile, the company will build five facilities of 300,000-ton polypropylene, 600,000-ton pyrolysis gasoline hydrogenation catalyst, 400,000-ton aromatic hydrocarbon, as well as 250,000-ton and 300,000-ton polyethylene with various density.

Benefiting from the abundant light hydrocarbon lying around Daqing City and a 12-million-ton oil refining capacity of Daqing Petrochemical, the foregoing project will introduce advanced technologies from overseas, said people familiar with the matter.

The builder is expected to see its yearly sales revenue and after-tax income separately enlarge CNY 7.97 billion and CNY 920 million, after putting the project into production. Besides, its profitability and after-tax yield will likely rise 14.34% and 13.03%, respectively.

Now, the country's fast-growing economy spurs an urgent demand for oil and chemical products, and thus Daqing Petrochemical is to boost its production capacity and cater to more market needs, on the strength of the project under construction.

Previously, PetroChina Co., Ltd. (SHSE: 601857;SEHK: 0857; NYSE: PTR), as an important listed arm of CNPC, promised to aggregately pour CNY 6 million into Daqing Petrochemical's 1.2- million-ton ethylene extension project.

BASF news item just out.

HAIK will be announcing results next Monday, I feel the results would be undesirable.

I agree hlyeo98, what a crip set if results.

91p now.

106p/110p now.

Good volume today, must be expecting good results in the morning.

Things to watch for Q1 results :

General :

Q4 07 Gross Profit Margin was 9.78% Q1 08 = ??? (Should go up)


Working cap and cash :

Q4 07 Inventory Levels were 44.858m Q1 08 = ??? (Should do down)

Q4 07 Trade Receivables were 27.862m Q1 08 = ??? (Should go down)

Q4 07 Cash level was 24.319m Q1 08 = ??? (Should go up)


Debts :

Q4 07 Short term debts were 82.453m Q1 08 = ??? (Should go down)

Q4 07 T/O payables were 41.039m Q1 08 = ??? (Should go down)


Will they have been reducing debt, reducing outstanding payables, reducing receivables and inventories and building cash ???????? or have they been increasing debt, increasing payables and also increasing working cap and reducing cash levels again ?


Soon to find out.

Thanks pp and hlyeo98, saved me a few hundred quid.

Good increase in chemical side profit and margin. Need a good read of the detail...

Results, gross profit margin down. Debts higher, inventories higher, trade receivables higher.......

Pretty damn poor........as was expected.