China July industrial profits rise at slowest pace in 3 months

Date Aug 28 2017 11:28:57

BEIJING, Aug 27 (Reuters) - Earnings growth for China's industrial firms cooled in July after accelerating for three straight months, reinforcing expectations the economy will slow over coming quarters as higher lending costs and property market curbs bite.

    Profits earned by China's industrial companies in July rose 16.5 percent from a year earlier to 612.7 billion yuan ($92.18 billion), slower than the previous month, the statistics bureau said on Sunday.

    That was the slowest rate of growth since profits rose 14.0 percent in April. 

    Profit growth slowed in July because some companies halted production due to especially high temperatures, He Ping of the National Bureau of Statistics bureau said in a statement along with the data release. 

    For the first seven months of the year, the firms notched up profits of 4.25 trillion yuan, a 21.2 percent jump from the same period last year and a touch slower than the 22.0 percent annual growth in the January-June period.

    Earnings for the industrial sector were boosted by a year-long, government-led construction spree, which fuelled demand and prices for building materials.

    Government efforts to shut older, heavily polluting mines and factories have given commodity prices fresh impetus in recent weeks. 

    Strong earnings, in turn, have opened the way for fresh investment, and given the country's long ailing "smokestack" industries more cash flow which could, in theory, be used to start paying down a mountain of debt.    

    Aluminum Corp of China Ltd (Chalco)  601600.SS   2600.HK  reported on Aug. 17 that its six-month net profit rose more than tenfold year-on-year as it cashed in sky-high aluminium prices.

    A day later, China's top state-run aluminium smelter said it will be making further investment in raising output in the second half of the year. 

    The manufacturing sector, which accounts for 88 percent of industrial profits, saw profit growth of 18.1 percent in the first seven months, trending down only slightly from 18.5 percent in the first half.


    But analysts say economic growth is starting to slow as measures to cool heated property prices and clamp down on riskier forms of lending put the brakes on activity.

    Beijing's efforts to reduce debt have pushed up lending rates, signalling tighter margins and tougher operating conditions for firms as debt servicing costs go up - a sign of slowing earnings growth over coming months.

    In addition to slower profit growth, Sunday's data showed profit margins and account receivables days outstanding weakened slightly in July after improving for the last two months. Industrial firms' net profit margin fell to 6.09 percent in July from 6.11 in June. 

    Weaker performance in the industrial sector is in line with July economic data that was mostly weaker than expected, after forecast-beating GDP growth of 6.9 percent in the first half.

    At the end of July, industrial firms' liabilities were 6.6 percent higher than a year earlier, compared with a 6.4 percent increase at the end of June.

    Profits at China's state-owned firms were up 44.2 percent at 927.4 billion yuan in January-July, compared with a 45.8 percent rise in the first six months. 

    The data covers large companies with annual revenue of more than 20 million yuan from their main operations.  

Source: Reuters

Edited by SHMET

China July power consumption rises 9.9 pct from year ago

Date Aug 21 2017 16:13:54

BEIJING, Aug 21 (Reuters) - China's power consumption in July rose 9.9 percent from a year ago to 607.2 billion kilowatt hours (kWh), according to data from the National Energy Administration (NEA).

    Consumption in the first seven months of this year reached 3,557.8 billion kWh, up 6.9 percent from a year earlier.

    China's July industrial power consumption rose 9.7 percent year-on-year to 429.4 billion kWh.

    China's total installed generation capacity reached 1,645.45 gigawatts by the end of July, according to NEA.

Source: Reuters 

Edited by SHMET

China's new home price growth cools in July - statistics bureau

Date Aug 18 2017 16:41:47

By Yawen Chen and Ryan Woo

    BEIJING, Aug 18 (Reuters) - China's home price growth slowed in July, with Beijing  declining for a second straight month, reinforcing expectations that property price growth may stagnate over the course of the year.  

    Government restrictions to keep prices in check weighed on larger cities, with July showing the slowest growth since August 2016, while smaller centres pulled back but remained robust.

    Policymakers have prioritised stabilising the property market ahead of an autumn leadership reshuffle, stressing the need to avoid dramatic price fluctuations that could threaten the financial system and harm social stability.

    As China's home price rises have generally been moderating and sales are slowing, analysts do not see a major risk of a sharp price fall or crash, given the strength of underlying housing demand. 

     "We need the administrative measures in the short term but keeping them long-term would be a retreat for the market economy," said Joe Zhou, Head of Research for China at Jones Lang LaSalle  JLL.N .  

    Nonetheless, developers expect the curbs to be longer-term.

    Ouyang Jie, vice-president of Shanghai-listed Future Land  601155.SS , believes the controls will be in place for the next five years, under the new government that follows a leadership reshuffle in the autumn.

    "We think the current restrictions on purchases, borrowing and price growth will continue for five years, but the price cap over new units may be relaxed gradually over the years," he said.

    Analysts say the speculative switch to smaller cities and their large housing overhang has resulted in an alarming rise in debt in those centres.

    Beihai, a small port city in the Guangxi region on China's southwest coast, had the biggest monthly price increase of 1.5 percent in July and posted robust annual growth of 14 percent.

     "I think the small city boom is a trap," JLL's Zhou said. "It won't last long because I don't see the possibility of a huge drop in inventory there while there is not enough population inflow to support demand."

    While the statistics bureau says the housing market should still be able to maintain stable growth, many economists expect the residential sector to lose momentum in the second half of the year in the face of policy tightening and an official financial deleveraging campaign.

    Average new home prices in China's 70 major cities rose 0.4 percent in July from the previous month, slowing from the 0.7 percent growth in June as policymakers battled to rein in demand.  

    In China's biggest markets, Beijing's new home prices fell 0.1 percent in July, after declining 0.4 percent in June. Shanghai prices stalled while Shenzhen prices fell by 0.2 percent from a month ago.     

    Compared with a year ago, new home prices rose 9.7 percent in July, easing from a 10.2 percent gain in June and marking the slowest growth since August 2016, Reuters calculated from National Bureau of Statistics (NBS) data.

    New construction starts measured by floor area, a telling indicator of developers' confidence, contracted for the first time since last September, falling 7 percent in July from a year ago, compared to a 14 percent increase in June.

    Household loans, mostly mortgages, fell to 561.6 billion Chinese yuan ($84.13 billion) in July from 738.4 billion yuan in June, according to Reuters calculations based on central bank data.

    But household loans as a proportion of total new loans rose to 68 percent from 48 percent in June, suggesting banks were more exposed to the property market even though it cooled in July. 


Edited by SHMET

China's national bureau of statistics (NBS) published the output of refined metal in July.

Date Aug 17 2017 15:50:28

China's national bureau of statistics (NBS) published the output of refined metal in July.

Copper rose 1.5 percent year-on-year to 733,000 tonnes.

Zinc fell 6.3 percent year-on-year to 476,000 tonnes.

Lead was up 5.6 percent year-on-year to 432,000 tonnes.

Iron ore production fell 0.2 percent year-on-year to 115 million tonnes.


Edited by SHMET

Tin market records deficit in January to June 2017

Date Aug 17 2017 15:06:25
The tin market recorded a deficit of 7.6 kt during January to June 2017 and there were no DLA deliveries during the period. Total reported stocks rose by 1.8 kt during June and ended the period 1.8 kt higher than December 2016. 

Global reported production of refined metal was up by 13 kt, compared with January to June 2016 total. Production in Asia was 14.8 kt higher than the January to June 2016 total. Apparent demand in China was 2.8 percent higher than the equivalent period of the previous year.

Global tin demand during January to June 2017 was 193.4 kt which was 1.6 percent above the comparable period of 2016. Japanese consumption was 15.2 kt which was 18 percent higher than the comparable total for 2016.

In June 2017, refined production was 31.7 kt and consumption was 34.5 k


Edited by SHMET