Coal producers drag down Shanghai index
Shanghai’s key stock index dropped today as coal producers paced the decline on expectations a decline in the price of crude oil will reduce demand for the alternative fuel.
The Shanghai Composite Index lost 0.48 percent, or 13.64 points, to 2,836.67 at 3pm.
Losers in the Shanghai market outnumbered gainers 496 to 317 while 15 did not change.
The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was down 0.39 percent, or 3.32 points, to 852.52.
Shenhua, the nation’s largest coal producer, dropped 2.71 percent to 32.31 yuan (US$4.74).
China Coal Energy Co, its second-biggest by sales, lost 1.97 percent to 13.90 yuan. The company may acquire China United Coalbed Methane Corp from its parent company to expand into the natural gas business, it said yesterday.
Shanxi Coking Co, the No. 1 publicly traded coke producer in China, slipped 2.84 percent to 10.95 yuan.
Crude oil for September delivery fell 2 percent to US$122.19 a barrel in New York, the lowest close since May 6. Oil has dropped 17 percent since its July record as the rising US dollar reduced the appeal of commodities as an inflation hedge.
But the falling crude price lifted airlines today.
Air China, the nation’s largest international carrier, rose 1.15 percent to 10.59 yuan. China Southern, the nation’s biggest carrier by fleet size, gained 0.73 percent to 8.32 yuan. China Eastern, the third largest by fleet size, surged 4.66 percent to 8.08 yuan.
Jet fuel accounted for about 40 percent of Chinese airlines’ costs in 2007, according to annual reports.
Sinopec, the country’s largest oil refiner, jumped 1.11 percent to 11.82 yuan. But PetroChina, the second-biggest refiner and the biggest market component, retreated from morning gains and slipped 0.13 percent to close the day at 15.20 yuan.
Elsewhere, GD Power Development Co, the Shanghai-listed unit of one of China’s five largest electricity producers, added 0.94 percent to 6.45 yuan. The company said it raised electricity prices about 8 percent starting on July 1.
Guangzhou Development Industry (Holdings) Co, a power generator, jumped the daily cap of 10 percent to close at 6.48 yuan. The company plans to form a 2.8 billion-yuan venture with Datong Coal Mine Group to make methanol in Shanxi Province, according to a Shanghai Stock Exchange statement yesterday.
Tags: coal, Methane, PetroChina, power, Shenhua, Sinopec