Oil, petrol, diesel prices to go up
At 24:00 today (June 28), the window for the twelfth round of China’s domestic refined oil price adjustments in 2021 will be launched. Many agencies that monitor oil products in China predict that this round will see domestic prices likely to rise for the ninth time this year.
Gao Qingcui, a refined oil analyst at Zhuo Chuang Information, believes that due to the rapid recovery of demand, and the possibility of the United States and Iran returning to a nuclear agreement, prices will go up. International oil prices have risen for five consecutive weeks. Affected by this, the rate of change in domestic crude oil continues to increase, and the current round will likely see fuel prices go up further.
Longzhong Information analyst Li Yan said rising oil prices have prompted some US energy companies to return to well sites, while global vaccinations are advancing rapidly, and the market expects demand to rebound in the second half of the year. OPEC+ sources said that it is discussing further progress from August to increase production, but no decision has been made just yet. It is expected that domestic refined oil products will see a ninth increase this year – the second of “two consecutive increases” in 2021.
Regarding the adjustment range, Zhuo Chuang Information predicts that at midnight tonight, the retail price of domestic gasoline and diesel will increase by 225 yuan and 215 yuan per ton respectively, and the discount price of #92 gasoline and #0 diesel will rise by 0.18 yuan. If the price falls, #92 gasoline will return to a “7 yuan era” in most areas of the country.
For the majority of car owners, fuel costs will continue to increase. Taking a family car with a fuel tank capacity of 50 litres as an example, filling a tank with #92 gasoline will cost 9 yuan more than before. Or a small private car that runs 2,000 kilometers per month and consumes 8 litres per 100 kilometres as an example; in the two weeks before the next price adjustment window opens, a consumer’s fuel cost will increase by about 14.4 yuan.
So, costs in the logistics industry have also increased. Taking the Steyr heavy-duty truck with a monthly mileage of 10,000 kilometres and a fuel consumption of 38 litres per 100 kilometres, the fuel cost of a single vehicle will rise by about 342 yuan over the next two weeks.
The next round of price adjustment will open at midnight on July 12. In regard to the market outlook, Gao Qingcui believes that Saudi Arabia will hold production cut talks with Russia at the end of the month, and is inclined to increase production moderately or will not hinder improvement in the oil market. Together with the optimistic outlook of the global economy and energy demand, it may support a consolidation of high oil prices in the next round.
Roche and Yidu team up on AI medical solutions
Yidu Technology and Roche will cooperate to explore the establishment of a digital disease diagnosis and management platform and ecosystem. The platform will host Yidu Technology and Roche’s advanced digital medical solutions, with the aim of fully supporting the entire process of patient diagnosis and treatment in China, including early screening, diagnosis, treatment, prescriptions, drug purchase and follow-up, to promote clinical diagnosis and treatment results and valued medical care. The intention of this cooperation will focus on, but not limited to oncology, hepatology, infectious disease, neurology, diabetes and cardiovascular disease.
At present, the medical and health industry is ushering in a new round of development. In-depth integration of artificial intelligence and disease diagnosis and treatment will promote innovation in this sector, and drive better and faster development of “smart” and precision medicine. From an industry perspective, artificial intelligence and big data technology are important driving forces for a digital transformation of the medical and health industry, and they are promising in the fields of personalized medicine, public health and chronic disease prevention and control. Yidu Technology’s medical artificial intelligence technology and Roche’s global leading R&D capabilities are regarded as a strong combination.
Yao Guoliang, general manager of Roche Diagnostics China, said: “Roche is committed to providing patients with truly individualized medical care, working with partners to create an integrated medical and health ecosystem, and providing full support for patients’ disease diagnosis and treatment. This time, Roche China has joined forces with the cooperation of Yidu Technology, which is an important part of our implementation of this strategy.”
China ranks its supply of key minerals & resources
It is common knowledge that rare earth elements are a trump card in China’s hands. It not only has the world’s largest reserves, but also the most advanced refining technology. Even the United States relies on China for 80% of its rare earth imports. If you want to ask about China’s position in the rare earth industry, then the interpretation in one sentence is “the Middle East has oil, and China has rare earths.”
However, China is vast and rich in mineral resources, and there are many advantages in these. The Ministry of Land and Resources has conducted investigations into 45 important minerals in China. These mineral resources are classified into three grades, according to supply capacity.
Firstly, the top tier is minerals that can achieve “self-sufficiency” or basically guarantee to meet demand. There are 26 kinds of minerals, including the rare earths, as well as tungsten, antimony, gallium, indium, tin, barium, graphite and others. Two of these – tungsten and antimony – also supply more than 80% of the global market.
Ganzhou, known as the “kingdom of rare earths”, is not only rich in rare earth reserves, but also referred to as the “World Tungsten Capital”. Tungsten resources are also significant, with cumulative proven reserves of up to 1.17 million tons, and China also has 60% of the world’s known deposits of black tungsten.
Meanwhile, the Tin Mine, located in Lengshui City in Hunan Province, has the title of “Antimony Capital of the World”, with an antimony resource reserve of up to 300,000 tons. In addition, China’s molybdenum and tin mines also supply about 40% of the global market. It can be said that these minerals, like rare earths, are the dominant minerals that China has with an important position in the world’s supply chain.
The second level is minerals or resources of which demand cannot be guaranteed, and supplies need to be supplemented through imports. There are 19 of these minerals or resources, including the well-known strategic items such as oil, natural gas, and iron ore, as well as mineral resources such as copper, manganese, nickel, and boron.
Take oil and iron ore as examples. China has a relatively high degree of dependence on foreign countries for these two strategic resources. China’s oil imports reached 542 million tons last year, and it depends on foreign countries for more than 70% of what it needs. A large portion of oil imports come from the Middle East, the world’s “energy heart”. Nowadays, oil has become China’s second largest import commodity, and the import cost is second only to computer chips.
As for iron ore, China also depends on foreign countries for more than 70% of what it needs. In 2020, the country imported 1.17 billion tons, and Australia’s proportion was about 60% of that amount. So, it wants to ensure a safe supply of such strategic resources urgently.
The third grade is resources that China has extremely low reserves or a severe shortage of. There are five such minerals – chromium, cobalt, platinum, potassium salt, and diamonds.
Take cobalt as an example. This metal is widely used in aerospace, electronics, ceramics, power batteries and other fields. But, according to data from the US Geological Survey, China’s cobalt reserves account for only about 1% of the world’s total, and its reserves are represent about 8% or 10,000 tons. Meanwhile, the world’s richest reserves are in the Congo (DRC), where nearly half of all known cobalt deposits are located.
It is worth mentioning that although diamonds are extremely scarce in China, synthetic diamond technology is “leveraged”. As early as 2016, China’s synthetic diamond production was close to 20 billion carats, which was 90% of the global market. However, while diamonds can be “manufactured”, other mineral resources are ultimately non-renewable, especially resources that rely heavily on imports, so how to ensure that they are not “stuck” in a crisis is a key consideration.
In 2016, China listed a strategic resource catalogue that included rare earth elements, oil, natural gas, iron ore and other important resources, which it needed to control. Rare earths is an example of one that China has controlled in terms of total mining volume in recent years.
The second priority for China is the increase of the acquisition of overseas mines and expand its sources of imports. For instance, China controls 40%-50% of Congo’s cobalt ore output.
Finally, ongoing effort is being made to increase domestic prospecting as China is a vast land with abundant resources, and there are still many places where prospecting can be undertaken. A few days ago, PetroChina announced that it had discovered a large oil and gas field with 1 billion tons of reserves in the Tarim Basin. So, via various means, China hopes to handle the “security” of the vital resources it needs.
Nongfu Spring’s Fukushima joke proves a fizzer
It has become ‘news’ on social media platforms that a new type of sparkling soda water launched by Nongfu Spring hsa the slogan “Made in Fukushima, Japan”. Clearly, that is a joke and reference to the site of the nuclear disaster which occurred a decade ago. And the peach flavoured drink is not proving very popular. No surprises there, either.
More pork drama
On June 16, the National Development and Reform Commission stated that the price of live pigs continued to fall due to factors such as the concentrated production of large live pigs, the increase in imported frozen pork, and weak seasonal demand. According to monitoring, from June 7 to 11, the national average pig-to-food ratio was 5.88:1. That meant prices had entered a three-level warning range for excessive decline according to the NDRC. That led to the Commission reminding farmers to scientifically arrange production and operation decisions to maintain pig production capacity at a reasonable level. It said that in its next step it would closely monitor pig production and market price trends with relevant departments, and organize the implementation of its “pre-plan”. So, the NDRC will carry out reserve adjustments to promote the stable operation of the live pig market.
Gree spikes on share buyback plan
On June 28, Gree Electric shares opened 3% higher. As of press time, the stock price rise had narrowed to 2.11% – 53.33 yuan. On Sunday evening (June 27), Gree Electric issued an announcement that the company intends to repurchase shares as per a proposal approved by the board of directors on October 13, 2020. The purpose was adjusted, from the original plan that “repurchase shares will be used for employee stock ownership plans or equity incentives” to “repurchase shares to reduce registered capital”. As of May 17, the repurchase has been implemented. The company has bought 101 million of its shares through centralized bidding and special securities repurchase accounts, for a total transaction amount of nearly 6 billion yuan ($929.3 million). After this, the company’s total share capital will drop from 6.015 billion shares to 5.914 billion shares.
Gree Electric said that this change to the second phase of repurchase shares and cancellation of the plan is a decision made by the company based on the current situation, which is conducive to improving the level of earnings per share and the return on investment for the company’s shareholders. It will not affect the company’s financial status.
The draft plans to repurchase company shares with a total value of not more than 3 billion yuan at a price of 27.68 yuan per share. At that time, Gree Electric’s share price was 53.68 yuan a share. The total number of employees who intend to participate in this employee stock ownership plan shall not exceed 12,000. Among them, Chairman and President Dong Mingzhu intends to subscribe up to 30 million shares, accounting for about 27.68% of the employee stock ownership plan. The draft once caused controversy among small and medium-sized investors. The points of dispute included whether Dong Mingzhu’s subscription ratio of more than 25% was too high, whether the performance evaluation index was too low, and whether the employee subscription price discount was too large.
On Wednesday (June 30), Gree Electric will hold its 2020 Annual General Meeting of Shareholders to review proposals including employee stock ownership plans.