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Soaring crude boosts profits at China coal-to-chemicals leader

Ningxia Baofeng said crude oil price volatility lifted feedstock dynamics for its olefins business, while it reported first-half profits equivalent to $1.4 billion, nearly double year-on-year.

Reported · Written up by our desk · Energy

China’s biggest coal-to-chemicals producer, Ningxia Baofeng Energy Group, reported record profits for the first half, as crude oil prices surged internationally, according to OilPrice citing Bloomberg.

OilPrice reports that Ningxia Baofeng’s first-half profit translated to the equivalent of $1.4 billion, after an especially strong second quarter when crude prices spiked amid a disruption to oil flows through the Strait of Hormuz.

The company attributed the profit strength to rapidly rising and highly volatile crude prices, saying that those moves increased feedstock costs for oil-based olefins, while domestic coal prices rose more moderately, helping coal-to-olefins production costs. OilPrice says the first-half result was nearly double on an annual basis.

OilPrice also notes that the Middle East conflict helped spur China’s coal-to-chemicals industry, with sector stocks reportedly up about 30% between late February and mid-March, supported by investor expectations that coal-based routes can produce fertilizers and petrochemicals without relying on petroleum. The story adds that even after moderation from spring peaks, oil prices remain higher than pre-war levels, which could continue to support coal-to-chemicals producers.

Latest closeWTI crude $82.68 ▼0.6%

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