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2 million barrels of Libyan crude heads for Shanghai

An oil tanker is carrying 2 million barrels of Libyan crude to China, ship-tracking data compiled by Bloomberg shows.

The Dalian Glory left Es Sider on Tuesday at 96 percent of its maximum sailing depth and heading for Yangpu, near Shanghai, according to data reported by IHS Inc.

The ship is going west toward the Atlantic Ocean, rather than toward the Suez Canal. The largest tankers cannot navigate the waterway full. The supertanker is the first to call at Es Sider in at least two years, the data shows.

Yurun profit plunges 93% on weaker demand

China Yurun Food Group Ltd, the country's second-largest supplier of meat products, has reported a 93 percent decline in first-half profit as China's slowing economy dented consumer demand and hog prices plunged.

Net income fell to HK$107 million ($14 million), or HK$0.059 a share, from HK$1.61 billion, or HK$0.881 a share, for the six months ended June, the company said in a statement to Hong Kong's stock exchange. Revenue declined 24 percent to HK$12.5 billion.

"Due to the slowdown in domestic economic growth, a continual increase in production costs and other unfavorable factors, the Chinese hog slaughtering and meat products processing industry faced tremendous challenges," the company said in the statement.

Founder Zhu Yicai left active management of the company in July. At the same time, the company appointed Chief Executive Officer Yu Zhangli as chairman and named Li Shibao as his replacement, the change coming less than 10 days after it rejected allegations of accounting irregularities and contaminated products as "groundless".

Tencent profit rises 32% on online advertising, games

Tencent Holdings Ltd, China's biggest Internet company, has posted a 32 percent rise in second-quarter profits driven by increased game sales and rising Web advertising.

Net income climbed to 3.1 billion yuan ($487 million) from 2.35 billion yuan a year earlier, Tencent said in a statement to the Hong Kong Stock Exchange.

The profit figure compared with the 3.08 billion yuan average of nine analysts' estimates compiled by Bloomberg.

Tencent added social-networking users to its sites including Qzone and Pengyou, helping the company boost Web advertising sales even as economic growth in China slowed.

Chief Executive Officer Pony Ma said the company is increasing its spending on e-commerce operations to challenge local industry leader Alibaba Group Holding Ltd and cut back on its reliance on online game sales.

"A lot of Tencent's online advertising business comes from consumer goods, and that should be less impacted by the economy," said Jim Tang at Shenyin Wanguo Securities in Shanghai, who rated Tencent as outperform before the announcement.

Cars recalled in Australia after asbestos warning

Great Wall Motor Co and Chery Automobile Co, China's two biggest car exporters, have recalled most of their vehicles sold in Australia after authorities found potential cancer-causing asbestos in some models.

Consumers should avoid "do-it-yourself" maintenance that may disturb contaminated engine and exhaust gaskets, the Australian Competition and Consumer Commission said in a statement.

The recall affects 23,000 vehicles, according to the statement.

Great Wall led shares of mainland automakers lower in Hong Kong, with commentators warning the news will seriously undermine the image of Chinese carmakers as they push for overseas sales.

Bear market lures foreign investors as locals pull out

International money managers are reported to be bargain hunting mainland stocks, as a third year of equity losses spurs local investors to empty trading accounts in record numbers.

While overseas firms were granted $6.9 billion of quotas to buy mainland securities since December, more than in any full year since the government program began, the number of Chinese stock accounts containing funds dropped by 788,000 to 56.3 million in the year to August 3 - the most for 12 months, according to regulatory data compiled by Bloomberg. A record 110 million are empty or frozen.

Analysts suggest stocks in the Shanghai Composite Index are trading at a 54 percent discount to their 10-year average.

Study: Canada should deepen trade ties with China

The Canadian Trade Minister Ed Fast said he welcomed a study recommending the nation deepen its trade and investment ties with China.

Fast said in an e-mailed statement that Canadian and Chinese officials had completed a study on ways in which the two economies are complementary.

The study recommends the countries "continue to deepen and strengthen our bilateral trade and investment ties through appropriate bilateral instruments," according to a joint news release with China's Commerce Minister Chen Deming posted on the trade department's website.

"We are carefully reviewing the information contained in the study and we are considering its findings," Fast said.

Makers of nickel pig iron cut output 50% as prices fall

Nickel pig iron producers in China, the biggest user, have suspended almost 50 percent of capacity as prices have fallen below costs.

The utilization rate is about 51 percent now, based on surveys of about 90 producers, which account for more than 80 percent of the nation's capacity, said Celia Wang, a senior market analyst at Shanghai Tsingshan Mining Investment Co, a unit of Tsingshan Holding Group, China's largest privately owned stainless-steel producer. Wang cited survey findings from an affiliate company in the group.

The biggest production cut since 2008 may support nickel prices in London, which have slumped 30 percent from February on ample global supply. New additions of stainless-steel capacity in China have drained nickel pig iron inventories and prompted users to seek imports of refined nickel.

Cotton to climb 9% as nation drains global surplus

Cotton, the second-worst performing commodity this year, may advance 9 percent as China drains a global surplus, and the worst monsoon in three years curbs the harvest in India, said the International Cotton Association.

Prices could rise to 80 cents a pound by year-end, Antonio Esteve, president of the association, said in an interview on Wednesday. Esteve is also the CEO of cotton operations at Switzerland-based Ecom Agroindustrial Corp.

Cotton gained as much as 2.2 percent to 73.69 cents on ICE Futures US in New York on Thursday.

Futures have slumped 67 percent since reaching a record in March 2011, reducing costs for clothing retailers including Gap Inc, as supply increased and slowing global growth hurt demand. The US Department of Agriculture on Friday cut its outlook for world demand 0.8 percent to 108.16 million, 480-pound bales, while boosting the outlook for stockpiles by 3.1 percent.

Corn harvest set for smaller increase on pest attack

China, the second-biggest corn grower, may have a smaller increase in its crop than expected this year because of damage from armyworms, the China National Grain & Oils Information Center said. However, imports may still decline.

The harvest is set to total 197 million metric tons, 500,000 tons less than forecast a month ago and a gain of 2.2 percent from last year, the State-owned researcher said in a report on Wednesday. Imports will probably be 3 million tons, it said.

The worst armyworm outbreak in 10 years hit more than 3 million hectares by Tuesday, the Ministry of Agriculture said on its website on Thursday. A 60-day campaign has begun to curb its spread, it said. The nation planted 34.3 million hectares of corn this year, said the grain center.

Cooking-oil suppliers asked to report prices

Government officials in China, the world's largest user of cooking oils, asked suppliers to report product prices weekly after telling them last month to avoid stoking inflation, three people familiar with the matter said.

The National Development and Reform Commission, the top planning agency, met executives from five producers this week in Beijing and asked them to provide updates on wholesale and retail prices, said the people, who asked not to be identified as they are not authorized to speak publicly on the matter.

Soybeans, crushed to produce oil, have jumped 28 percent in Chicago since June 1 and reached a record $16.915 a bushel on July 23 as the worst US drought in half a century parched crops in the Midwest.

Solar bailouts to divert funds needed for stimulus

Debt in two of China's biggest solar companies is trading at distressed levels, putting pressure on policy makers to provide financial aid that might have been used to combat a slowdown in Asia's biggest economy.

Convertible notes due March 2013 sold by Suntech Power Holdings Co, the world's largest solar panel maker, fetched 43 cents on the dollar in New York on Tuesday, after sinking to a record-low 32 cents on Aug 6. LDK Solar Co's yuan-denominated bonds due February 2014 traded at 27 percent of face value on the Singapore Exchange on Monday. The two companies said since March that they may fail without access to more funds.

China Daily - Agencies

(China Daily 08/16/2012 page14)