3538243_DISCUSSION 1 - CHINA - Situation in Guangdong

Date 2008-03-26 23:37:11
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Who cares if these ChiComs all croak?=20=20=20

-----Original Message-----
From: [email protected] [mailto:[email protected]]
On Behalf Of [email protected]
Sent: Wednesday, March 26, 2008 5:33 PM
To: Rodger Baker; Analysts
Subject: Re: DISCUSSION 1 - CHINA - Situation in Guangdong

But why delays now and not two weeks ago for example.=20
Sent via BlackBerry by AT&T

-----Original Message-----
From: "Rodger Baker"

Date: Wed, 26 Mar 2008 22:25:47
To:"Analysts" , "Peter Zeihan"
Subject: Re: DISCUSSION 1 - CHINA - Situation in Guangdong

>From china:

I know that the severe snow storms destroyed many transportation and power supply systems=A0 and oil refining facilities. They need=A0some time to reconstruct them and=A0come back to their previous capability of production and delivery.=A0 Experts estimate that this natural disaster would reduce 1 percent of China's GDP.=20
=A0=20
Hunan, Guangdong, and Guangxi were worst-striken. Hunan's governor's wife is my good friend. I have contacted her duringmy stay at beijing. She told me about the unprecedented destruction by the snow storms.=20
=A0=20

--=20
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-----Original Message-----
From: Jennifer Richmond

Date: Wed, 26 Mar 2008 17:22:19=20
To:Peter Zeihan
Cc:Analyst List
Subject: Re: DISCUSSION 1 - CHINA - Situation in Guangdong

Will gather more on all of these questions today.=A0=20
=20
Peter Zeihan wrote: Guangdong is quite a long way from China's oil
producing regions (those are in the far north and to a lesser degree the
west)
=20
it is largely dependent upon imported crude in order to refine (locally)
its fuels
=20
you cannot blame this shortage on leftover snow issues from the storms
since supplies can just sail into port
=20
that leaves a) a refinery breakdown of large proportion, b) a shortage of
cash for purchasing crude or c) a surge in demand that has outstripped
supply faster than alternative supplies could be brought on
=20
a) would be temporary
c) would require some chinks being worked out as supplies are rerouted
b) would be the bad scenario
=20
how to find out which it is:
=20
find out firms control local refining and oil storage, and contact them (is
the problem with crude supply, throughput at the refineries, or
distribution?)
=20
if it is crude supply at the import level, its b)
if it is throughput, its a)
if it is distribution, its c)
=20
=20
=20
=20
Lauren Goodrich wrote: We need answers..... Lauren Goodrich wrote: *So trucks can fill up and other cars can't... if China going to rationing... changes industrial dynamics of the country... Is this a specific breakdown in Guangdong or is this a much larger problem hitting other places? Difference between price problems and rationing bc of no fuel... the latter is a huge problem Are they just putting everything into industry and that is why there is a shortage elsewhere? Is this a temporary structural failure? Is this a refining issue? There is no reason China with all its money can't buy the fuel it needs.* [email protected]
wrote: This is important. We need to
write on this. Sent via BlackBerry by AT&T -----Original Message----- From:
Jennifer Richmond
Date: Wed, 26 Mar 2008 11:07:25
To:[email protected]
Cc:[email protected] ,
[email protected],scott stewart
Subject: INSIGHT - CHINA - Situation in Guangdong SOURCE: CN7 PUBLICATION:
Yes ATTRIBUTION: Investigation Company SOURCE RELIABILITY: A ITEM
CREDIBILITY: 2 SUGGESTED DISTRIBUTION: Analysts SPECIAL HANDLING: None Here's what we have learned after talking to a range of gas stations both within GUANGZHOU and outside of the city. Ordinary citizens and professional drivers were also consulted, and we have stayed abreast of current media reports. No government agency we contacted would discuss this issue without proof of press credentials, claiming it was too sensitive. -As you know, diesel has been in short supply for the past 10-12 days. -Reports of rations on the east coast down through the south are accurate--thus rationing is occurring throughout the major industrial centers. -Ration rates are determined by the central government rather than provincial or municipal authorities. -In GUANGDONG, diesel is currently rationed to about RMB5.15 /liter, and =B1 .10 throughout the region. -Trucks have generally been allo=wed
to fill to capacity, but there are intermittent reports that some gas stations will only allow trucks to fill up to RMB300 RMB (about USD42.50). That does not buy enough g a s to fill a large truck, but it can fill a car. Reportedly, some truck drivers are going to multiple gas stations in order to completely fill their vehicles. Obviously, this cuts into shipping time and adds significant expense. However, these reports seem to be exaggerated in the media. -Lines of trucks at gas stations outside GUANGZHOU and throughout GUANGDONG have occasionally been up to 30 minutes long during the busiest times (between 8:00-10:00 and 14:00-16:00), which can substantially cut into normal transit times. However, our understanding is that these are isolated circumstances. -Large trucks are not allowed to operate inside the city proper, so lines are not prevalent within GUANGZHOU CITY. Nevertheless, car owners that use diesel within the city have had some issues with rationing, lines, and, prices. -Gas station managers are well-aware of the rumors of hoarding and believe SINOPEC and CNPC actually have more diesel on hand than they are distributing. -Global pr i ces of crude are obviously increasing, so in all likelihood, the government will not be able to maintain current ration prices for much longer. -News reports here claim that the government from the past two days claim that the government has enough diesel to last over the next 10 days. Of course, there is no real way to confirm this. -- Lauren Goodrich Eurasia Analyst *Stratfor Strategic Forecasting, Inc.* T: 512.744.4311 F: 512.744.4334
[email protected]
www.stratfor.com
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