rongsheng north america inc pricelist

Rongsheng Machinery Manufacture Ltd of Huabei Oilfield, Hebei, which was founded in 1976, has now been an internationally famous comprehensive petroleum machinery manufacturer, and has grown to be the largest manufacturer and dealer of land-use BOPs.

The company products include BOPs, BOP control system, choke and kill manifolds, snubbing equipment, mud pump, wellhead equipment and Christmas tree, pumping units, tubing and drill pipe joint, etc, which have all passed certification by American Petroleum Institute (API). Four categories out of these products, namely BOPs, BOP control system, choke and kill manifolds and mud pumps, have passed certification of GOST and RTN in Russia.

NOTE: Rongsheng North America, Inc. is the only legal subsidiary of Rongsheng Machinery Manufacture Ltd. in the United States which is authorized to sell "HRSB" brand products including BOP"s, Mud Pumps and Well Heads.

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HONG KONG (Reuters) - Shares in China Rongsheng Heavy Industries Group Holdings Ltdtumbled 16 percent on Monday after the U.S. securities regulator accused a company controlled by the shipbuilder"s chairman of insider trading ahead of China"s CNOOC Ltd"sbid for Canadian oil company Nexen Inc.Labourers work at a Rongsheng Heavy Industries shipyard in Nantong, Jiangsu province May 21, 2012. REUTERS/Aly Song

The U.S. Securities and Exchange Commission filed a complaint in a U.S. court on Friday against a company controlled by Rongsheng Chairman Zhang Zhirong, and other traders, accusing them of making more than $13 million (8.2 million pounds) from insider trading ahead of CNOOC’s $15.1 billion bid for Nexen.

“The news around the chairman comes on the back of other operational and credibility issues,” Barclays said in a note to clients. “We think China Rongsheng presents significant company-specific risk.”

In a filing with the Hong Kong stock exchange, Rongsheng - which entered a strategic cooperation agreement with CNOOC in 2010 - said it did not expect the U.S. investigation to affect its operations. It said Zhang did not have an executive role in the company.

Rongsheng, controlled by Zhang, also issued a profit warning on Monday, saying first-half earnings would fall sharply as a result of the shipbuilding downturn.

“Since weak earnings had been expected and the stock had already come down quite a bit, the early selling was mainly triggered by the insider trading probe,” said Steven Leung, a director at UOB Kay Hian.

Zhang was ranked the 22th richest Chinese person by Forbes Magazine in September 2011. But his net worth fell by more than half in the past year to $2.6 billion in March 2012 as shares of Rongsheng tumbled.

The unnamed Singapore traders used accounts in the names of Phillip Securities and Citibank C.N, while Well Advantage made its trades through accounts held at UBS Securities and Citigroup Global Markets. Neither of the Well Advantage accounts had traded Nexen shares since January 2012, and the Citigroup account had been completely dormant for over six months, the SEC says.

The targeted size suggests Zoomlion, which is already listed in Shenzhen, has the chance to overtake shipbuilder China Rongsheng Heavy Industries as the third largest IPO in Hong Kong this year. Rongsheng raised $1.8 billion after pricing its offering in the lower half of the indicated range last month.

If successful, Zoomlion’s listing will help cement Hong Kong’s position as the world’s hottest IPO market in 2010. There was a total of $51 billion raised through IPOs in the first 11 months this year, representing an increase of 113% from $24 billion in the same period last year, Hong Kong Exchanges and Clearing said in an announcement on its website yesterday. A total of 92 new companies listed in these 11 months, it said.

Based in the city of Changsha in the middle of China, Zoomlion is a leading manufacturer of construction machinery, including concrete machinery, crane machinery and environmental and sanitation machinery.

China and other developing countries represent the fastest growing market for construction machinery. In 2009, China accounted for approximately 42.6% of global sales and became the largest market for construction machinery, followed by North America and Europe, Zoomlion said in its preliminary IPO prospectus.

Zoomlion has been listed on the Shenzhen stock exchange since October 2000. It made Rmb2.4 billion ($355 million) of net earnings in 2009 and Rmb2.16 billion in the first six months this year.

Nov. 19 (Bloomberg) — In China’s “Shipping Valley,” where the Yangtze River empties into the sea north of Shanghai, the once-bustling home of the nation’s biggest private shipbuilder is deadly quiet on a recent morning.

Rows of dilapidated five-story dormitories in the city of Nantong, previously housing China Rongsheng Heavy Industries Group Holdings Ltd.’s 38,000 employees, were abandoned after the shipbuilder teetering on collapse cut almost 80 percent of its workers over the past two years. Most video arcades, restaurants and shops serving them have closed.

A $6.6 trillion credit binge during the past five years, encouraged by Beijing policy makers as stimulus to combat a global economic slowdown, now threatens to stoke a debt crisis. At stake are trillions of yuan in bank loans that companies producing everything from ships to steel to solar power are struggling to repay as the world’s second-largest economy heads for the weakest annual expansion since 1999.

Rongsheng, which is seeking a government bailout after accumulating 25 billion yuan ($4.1 billion) in unpaid loans as of June, including to Bank of China Ltd., is a casualty of over- investment gone bust. In Nantong, the only remaining market is selling past-its-shelf-life bread, woolly shoe pads and other dusty items at a discount as shopkeeper Qiu Aibing prepares to wind down before winter. There’s no sign of a single customer.

“In the next three to four years, industries with excess capacity will be the main source of credit loss for banks and their nonperforming loans as China cleans up the legacy,” said Liao Qiang, a Beijing-based director at Standard & Poor’s. “The speed of the process will depend on the government’s determination and whether they are willing to incur short-term pain for long-term gain.”

China’s economy probably will expand 7.6 percent in 2013, the weakest pace since 1999, even as growth rebounded in the third quarter, according to the median estimate of economists surveyed by Bloomberg News.

China’s credit quality started to deteriorate in late 2011 as borrowers took on more debt to serve their obligations amid a slowing economy and weaker income. Interest owed by borrowers rose to an estimated 12.5 percent of China’s economy from 7 percent in 2008, Fitch Ratings estimated in September. By the end of 2017, it may climb to as much as 22 percent and “ultimately overwhelm borrowers.”

The nation might face credit losses of as much as $3 trillion as defaults ensue from the expansion of the past four years, particularly by non-bank lenders such as trusts, exceeding that seen prior to other credit crises, Goldman Sachs Group Inc. estimated in August.

Rongsheng, whose assets jumped sevenfold between 2007 and 2012 when government-directed lending led to a shipbuilding boom, also has loans outstanding to Export-Import Bank of China and China Development Bank Corp., state-owned policy banks set up to provide financial support at a cheaper cost to companies and industries endorsed by the government. Rongsheng may post a second consecutive loss of 2 billion yuan this year and a 1.1 billion yuan loss in 2014, according to a median estimate of analysts in a Bloomberg survey.

Rongsheng now relies on its remaining 8,000 workers to build the world’s biggest cargo ships for Brazil’s iron-ore producer Vale SA and Oman Shipping Co., as well as smaller vessels and oil tankers. Workers in its shipyards, mostly from other parts of China, and local staff in its Shanghai office have had their salaries delayed, sometimes by two months, a person with knowledge of the matter said.

Rongsheng declined in an e-mail to answer questions about its operations. Spokesmen for ICBC and China Construction Bank Corp. declined to comment on the prospect of rising bad loans, while those at Bank of China, Agricultural Bank of China Ltd. and China Development Bank didn’t respond to requests.

The pain is being experienced by Rongsheng’s peers nationwide. A third of the country’s 1,600 shipyards may shut down within five years amid a global vessel glut, Wang Jinlian, secretary general of the China Association of the National Shipbuilding Industry, said in July.

“The 2008 stimulus exacerbated an industrial glut that has been in existence since 2003,” S&P’s Liao said. “We expect the government to take measured steps in a crackdown on overcapacity because they need to weigh the impact on financial stability.”

Nonperforming loans at Chinese banks increased for an eighth consecutive quarter in the three months ended Sept. 30 to 563.6 billion yuan, extending the longest streak in at least nine years. Still, they account for just 0.97 percent of the nation’s outstanding loans, according to the China Banking Regulatory Commission.

The bad-loan ratio could climb to as high as 1.5 percent in the next few quarters, according to Lian Ping, chief economist at Shanghai-based Bank of Communications Co. Most of the increase, he said, will come from the provinces of Jiangsu, where Nantong is located, and Zhejiang, south of Shanghai, where small businesses have been hit hard by the slowdown.

In the first six months of this year, soured loans increased by 18 billion yuan in Jiangsu, more than any other Chinese province, followed by Zhejiang and Shanghai, the official Xinhua News Agency reported.

Government and banks’ support for the solar industry since late 2008 has resulted in at least one factory producing sun- powered products in half of China’s 600 cities, according to the China Renewable Energy Society in Beijing. China Development Bank, the world’s largest policy lender, alone lent more than 50 billion yuan to solar-panel makers as of August 2012, data from the China Banking Association showed.

An unidentified local bank reported a 33 percent nonperforming-loan ratio for the solar-panel industry, compared with 2 percent at the beginning of the year, with the increase due to Wuxi Suntech, China Business News reported in September.

“The real situation is much worse than the data showed” after talking to chief financial officers at industrial manufacturers, said Wendy Tang, a Shanghai-based analyst at Northeast Securities Co., who estimates the actual nonperforming-loan ratio to be as high as 3 percent. “It will take at least one year or longer for these NPLs to appear on banks’ books, and I haven’t seen the bottom of deterioration in Jiangsu and Zhejiang yet.”

The same is true in industries such as steel and cement, which were named by the State Council as facing a “serious” glut. China’s economic planners have sought to rein in the steel industry since at least 2004, when work on a 10.6 billion yuan project in Jiangsu was halted. Even so, annual capacity has risen to 970 million metric tons, according to the steel association, exceeding the industry’s output by 35 percent in 2012. China produces seven times more than No. 2 Japan.

About 10 million tons of aluminum production capacity is being built at a time when the industry incurred combined losses of 670 million yuan in the first half, with some producers in central and eastern China facing severe losses, the Ministry of Industry of Information Technology said in July.

That month the ministry ordered more than 1,400 companies in 19 industries including steel, ferro alloys and cement to cut excess production capacity this year, an indication that the government is pursuing pledges to fix fundamental issues in the economy even as growth slows. Excess capacity was supposed to be idled by September and eliminated by year-end.

China’s land ministry yesterday told local authorities to ban allocations for any new production projects by overcapacity industries including steel and shipbuilding, the official Xinhua News Agency reported.

Under President Xi Jinping’s reforms laid out last week, the private sector will be boosted by looser state controls, while local government officials will be evaluated not only on increases in GDP but also on indicators such as energy consumption, overcapacity and new debt.

As companies take on more debt, the efficiency of credit use has deteriorated. Since 2009, for every yuan of credit issued, China’s GDP grew by an average 0.4 yuan, while the pre-2009 average was 0.8 yuan, according to Mike Werner, a Hong Kong-based analyst at Sanford C. Bernstein & Co.

Credit growth may slow over the next year and a half from the 20 percent to 25 percent gains in recent years to about 15 percent, Josh Klaczek, head of Asia financial services for JPMorgan Chase & Co., said in July. The expansion of nonperforming loans will depress profits and curb the ability of banks to increase dividends, and if more loans sour, lenders may need to raise capital, he said.

“Banks currently have the ability to absorb a decent amount of bad loans, and local government involvement will slow the speed of NPL increases,” S&P’s Liao said.

In Nantong, handmade-noodle-shop owner Ma Shuntian said he’s still a believer, even after losing 50,000 yuan this year. Ma and his wife pumped almost 1 million yuan into the restaurant five years ago after selling everything they had in Qinghai province and moving to the area where Rongsheng’s workers reside. In a good year, selling noodles brought in more than 100,000 yuan in profit.

“I hope Rongsheng can come through this crisis and the town comes back to life,” said Ma, a father of three. “If they earn big money, I can earn small.”

Textile giants Rongsheng and Hengli have shaken up China"s cozy, state-dominated oil market this year with the addition of close to 1mn b/d of new crude distillation capacity and vast, integrated downstream complexes. Petrochemical products, rather than conventional road fuels, are the driving force for this new breed of private sector refiner. And more are on their way.

Tom: And today we are discussing the advent of petrochemical refineries in China, refineries that have been built to produce mainly petrochemical feedstocks. Just a bit of background here, these two big new private sector firms, Rongsheng and Hengli, have each opened massive, shiny new 400,000 b/d refineries in China this year. Hengli at Changxing in Northeast Dalian and Rongsheng at Zhoushan in Zhejiang Province on the East coast. For those unfamiliar with Chinese geography, Dalian is up by China"s land border with North Korea and Zhoushan is an island across the Hangzhou Bay from Shanghai. And the opening of these two massive new refineries by chemical companies is shaking up China"s downstream market. But China is a net exporter of the core refinery products, gasoline, diesel, and jet. So, building refineries doesn"t sound like a purely commercial decision. Is it political? What"s behind it? How will it affect the makeup of China"s petrochemical product imports?

Chuck: And clearly, the driver here for Rongsheng and Hengli, who as Tom mentioned, are chemical companies, they are the world"s largest producers of purified terephthalic acid, known as PTA, which is the main precursor to make polyester, polyester for clothing and PET bottles. And each of them were importing massive amounts of paraxylene, paraxylene being the main raw material to make PTA. And paraxylene comes from the refining of oil. And really the alternate value for paraxylene or its precursors would be to blend into gasoline to increase octane. So, when looking to take a step upstream in terms of reverse or vertical integration, they"ve quickly found themselves not just becoming paraxylene producers, but in fact becoming refiners of crude to begin with, which of course, is quite complex and it involves all kinds of co-products and byproducts. And as many know, the refining of oil, the primary driver there, as Tom has mentioned, is to produce motor fuels. So, we"re reversing this where the petrochemicals become the strategic product and we look to optimize or maybe even limit the amount of motor fuels produced.

So, just as an order of magnitude and to show the numbers aren"t so massive in terms of global PX demand or paraxylene demand. Back in 2010, the global demand for PX was around 30 million tons for the year, of which Chinese demand was about a third or 9.8 million tons. And then last year in 2018, global demand had increased to 43.5 million tons, but of which now China was consuming 25 million of those 43.5 million tons. So, you can see that China is consuming more than half of the global PX demand and yet their production or their capacity to produce PX was far below that. And as a result, China imported last year nearly 16 million tons of PX or about a third of the global production was actually shipped into China by producers who are in the Middle East or the primary sources are from Northeast Asia, Japan, Korea, Taiwan, and then Southeast Asia as well.

Chuck: And margins, of course, as well because no one wants to shut down their unit just to accommodate the new Chinese production. And what remains to be seen is global operating rates for these PX units will be reduced to maybe unsustainable levels. And as margins come down, they"ll be down for everyone, but the most efficient suppliers or producers will be the ones that survive. And in the case of Hengli and Rongsheng, low feedstock costs, if you"re driving down the cost of paraxylene, you take the benefit on the polyester side because now you have very competitive or very low-priced feedstock.

Chuck: Well, clearly anyone who"s not integrated downstream into PTA, which many of those Northeast Asian producers are not, will be strategically challenged. And how do they react? Do they look at somehow producing more gasoline for instance, because they"re not able to achieve the values into chemicals? That could be an option. Or do they reduce capacity by shutting down a unit here and a unit there? I think the answer is all of the above. Then it will be fairly choppy between now and then. The U.S. has already shut down one of its units. Chevron in Pascagoula shut down its paraxylene production capacity earlier this year, and so we could actually see the U.S. become more and more of an importer of PX whereas 10 years ago, we were a very large exporter.

Tom: That"s a really interesting point actually. Looking at it from a refining economics point of view, if you were trying to diversify your revenue stream, for example, you probably wouldn"t want to increase your gasoline production. And gasoline margins in Europe are barely breaking even, they"re about $4 a barrel. In China, gasoline crack spreads are actually negative. So, fine, they"re self-sufficient in the paraxylene they need for weaving, but are they just... the refiners themselves, Hengli and Changxing, are they now just soaking up losses from the sales of their transport fuels? I think they may be initially, but they"re not just giving their gasoline away, obviously, these refineries were conceived as viable commercial concerns. Hengli anticipates profits, I think, of around 12 billion Yuan per year from its Changxing refinery giving a payback period on that investment of around five years. And each company, interestingly enough, has a distinct marketing strategy for their transport fuel.

Rongsheng is trying to build itself into a retail brand around Shanghai and the Zhejiang area. And Hengli is trying to muscle into the wholesale market on a national level, so it"s gonna be selling products across China. And in that respect, as we were discussing earlier, in fact, Rongsheng appears to have an advantage because where it"s located on the East Coast of China, that region is net short still of transport fuels, but Hengli in the Northeast, that"s a very competitive refining environment. It"s a latecomer to an already pretty saturated market: PetroChina, a state-owned oil giant, is a huge refiner up in Northeast China with its own oil fields, so a ready-made source of low-cost crude. And it"s also very close to the independent sector refining hub in Shandong Province, which is the largest concentration of refineries in China. So, I think there are definite challenges for them on the road fuel front, even if it sounds like they"re going to be pretty competitively placed further downstream in the paraxylene market.

Tom: Well, that"s one of the peculiarities of the Chinese market. As private sector companies, neither Rongsheng nor Hengli are allowed currently to export transport fuels. That"s a legacy concern of the Chinese government to ensure energy self-sufficiency downstream to make sure there"s adequate supply on the domestic market of those fuels. So, that is a real impediment for them. And when they ramp up production of gasoline, diesel, and jet, they are driving down domestic prices and they are essentially forcing product into the seaborne market produced by other refineries. So, in that respect, the emergence of Hengli in Northeast China on PetroChina"s doorstep has created a huge new sense of competition for PetroChina in particular. And I think certainly when you look at their recent financial data, it"s quite clear that they are struggling to adapt to the new environment in which it"s essentially export or die, because these new, massive refineries are crushing margins inside China.

I think globally it"s increasingly a competitive environment for road fuels. China is already a net exporter of over 1mn b/d combined of gasoline, diesel, and jet. It"s the fastest-growing exporter of those fuels in the world. But over-supply is also percolating through into the seaborne market: Indian diesel exports are rising; everyone is trying to desperately seek out net short regions and they"re having to ship product further and further overseas. And we"re seeing a situation emerge now in China where these refineries are importing crude perhaps from Latin America and they"re exporting finished products to those same markets from which they took the crude. It"s a tricky arbitrage, one would imagine.

Chuck: And going back specifically to the Hengli and Rongsheng projects, it"s interesting to note, again, going to an order of magnitude or perspective, Hengli is producing or has capacity to produce 4.5 million tons of paraxylene. And in phase one, Rongsheng will have capacity to produce 4 million tons. And I know those are just large numbers, but again, bear in mind that last year, global demand was 43.5 million. So, effectively, these two plants, they could account for 20% of global demand. Just these two projects themselves to give you an idea of just how massive they are and how impactful they can be. Impactful or disruptive, it remains to be seen.

Chuck: It"s remarkable, but just a note of caution, there have been other petrochemical and refinery projects built recently in Saudi Arabia and in Malaysia, in particular, with established engineering and established chemical and refining companies. And they"ve had trouble meeting the targeted dates for startup and it"s one thing to be mechanically complete, it"s another thing to be operationally complete. But both Hengli and Rongsheng have amazed me at how fast they were able to complete these projects. And by all reports so far, they are producing very, very effectively, but it does remain to be seen why these particular projects are able to run whereas the Aramco projects in Malaysia and in Rabigh in Saudi Arabia have had much greater problems.

Tom: It sounds like in terms of their paraxylene production, they are going to be among the most competitive in the world. They have these strategies to cope with oversupplied markets and refined fuels, but there is certainly an element of political support which has enabled them to get ahead of the pack, I guess. And suddenly in China, Prime Minister Li Keqiang visited the Hengli plant shortly after it came on stream in July, and Zhejiang, the local government there is a staunch backer of Rongsheng"s project. And Zhoushan is the site of a national government initiative creating oil trading and logistics hub. Beijing wants Zhoushan to overtake Singapore as a bunkering location and it"s one of the INE crude futures exchanges, registered storage location. So, both of these locations in China do enjoy a lot of political support, and there are benefits to that which I think do allow them to whittle down the lead times for these mega projects.

So, thank you for joining us today, and it"ll be interesting to follow all of these developments because there still are so many moving parts. And you can follow this on the petroleum side with China Petroleum, the publication in which Tom edits out of London or some of our petrochemical reports. We do daily assessments on the paraxylene markets as well as monthly outlooks, which include global price forecasts. And we have databases which show supply, demand, and trade flows, etc. And then also please tune in for future episodes of the "China Connection." And we thank you for your time and attention.