Metals and shipbuilding rise on consolidation and defence plans
China's larger steel companies saw stocks rise today, including Baoshan Iron & Steel Co (SH:600019), which increased 1.2 percent on the back of the government’s consolidation plan. The plan will see larger steel-makers taking over their smaller rivals. The restructuring, however, seems incapable of solving all the problems that Chinese steel-makers are facing. In central China’s Henan province over 1,000 workers at Linzhou Iron & Steel Co blocked a city centre road on March 21 to demand unpaid wages and insurance premiums.
Aluminium Corporation of China Ltd (SH:600600; HK:2600), the nation’s biggest producer of the metal, surged 16 percent on Hong Kong trading. Jiangxi Copper (SH:600462; HK:0358), China’s largest copper producer, gained 11.61 percent in Hong Kong and 2.19 percent in Shanghai.
China aims to boost gold production
China will seek to boost underground gold reserves by 800 tons and increase production from 282 tons a year ago to 290 tons this year and encourage consolidation so that the top 10 gold producers will account for more than half the nation's output, the Ministry of Industry and Information Technology said on its Website.
China Zijin Mining (SH:601899; HK:2899), China’s largest gold producer, climbed to the 10 percent trading cap in Shanghai and rose 4.42 percent in Hong Kong. The company said profit rose 20 percent to RMB3.07bn last year because of higher bullion prices and increased output. The country’s gold output grew 4.26 percent year-on-year to 282.007 tones in 2008. Shandong Gold (SH:600547) also climbed to the 10 percent cap.
Ship-builders rise on aircraft carrier rumours
Liang Guanglie, China’s Minister of Defence, told his Japanese counterpart on March 20th that “China will not be without an aircraft carrier forever” On March 15, Wu Huayang, deputy political commissar of the Chinese navy, said the country has “the determination that we can build an aircraft carrier in the not too distant future”.
China State Shipbuilding Co (SH:600150), the country’s biggest ship-builder, Guangzhou Shipyard International Co (SH:600685), a subsidiary of the company, and Jiangnan Heavy Industry Co (SH:600072) all surged to the 10 percent trading cap.
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