China to Shut Mines, Oil Wells, Plants, After Quake--UPDATE

China ordered coal mines, chemical plants and oil and gas wells to halt production to avoid further casualties after the country's strongest earthquake in 58 years killed more than 12,000 people.Companies in affected areas must evacuate workers and can't resume output until conditions allow for safe operations, the Beijing-based State Administration of Work Safety said on its Web site today. Sichuan province, where yesterday's 7.9 magnitude temblor struck, holds about 40 percent of China's natural gas reserves and accounted for 22 percent of its output in 2006.The earthquake damaged power plants and transmission lines and may cut the nation's energy demand. The State Electricity Regulatory Commission, China's power industry regulator, today ordered"24-hour'' monitoring at generation and distribution networks and asked utilities to report accidents immediately."This earthquake in China may impact demand from power plants being down,'' Phil Flynn, a senior trader at Alaron Trading Corp. in Chicago, said in a telephone interview."Demand for oil was already down in April.'' Chinese oil imports, the world's third-biggest, fell for the first time in 18 months in April as record crude prices discouraged refiners from purchasing oil to turn into fuel for sale below cost. Oil for June delivery rose to a record $126.98 a barrel today.
Electricity Grid
State Grid Corp. of China, the nation's largest electricity distributor, said it has started repairs after about 5.5 gigawatts, almost 1 percent of China's generation capacity, were idled in Sichuan and Shaanxi provinces because plants were disconnected from the national network.While repairs have started in most areas, the company hasn't been able to reach"two or three'' counties because of damage to roads and telephone links, spokesman Zhang Haiyang said by mobile phone today. He declined to give a timetable for when the State Grid expects to fully restore power supply.China Huadian Corp., the nation's fourth-largest power producer, said the quake killed and injured a number of people at the construction site of a hydropower plant in Sichuan.Some Beijing-based company's generators restarted after being halted yesterday, China Huadian's said in a statement.Two chemical plants collapsed in Shifang city, burying hundreds of people and leaking more than 80 tons of liquid ammonia, the Xinhua News Agency reported yesterday, citing the work safety bureau.
PetroChina, Sinopec
Power outages affected some small coal mines in Sichuan and Shaanxi, Huang Yi, spokesman of the state work safety bureau, said by mobile from Beijing today. No casualties have been reported so far at underground coal mines, he said.PetroChina Co. adopted"emergency controlling measures'' to ensure safety, spokesman Mao Zefeng said by mobile phone. The country's biggest oil producer restarted an oil products pipeline in western China that was shut for more than 10 hours for checks, said Yu Baocai, general manager at the company's Lanzhou refinery.PetroChina has natural gas production and piped-gas operations in Sichuan and also transports oil products by pipeline within the province, Mao said. He declined to comment on whether the company will shut its natural gas wells and the extent to which production may be affected.
Food Supplies
China Petroleum & Chemical Corp., known as Sinopec, said today there hasn't been any"huge impact'' on its operations from the quake. The company's Puguang gas field is located in the northeastern part of Sichuan, far from the quake's epicenter in the western part of the province, spokesman Huang Wensheng said.The earthquake had its epicenter 90 kilometers (56 miles) from Chengdu, the capital of Sichuan in southwestern China.Central China's main railway remained closed, hampering efforts to aid survivors."It will be very hard to reopen the line'' running from Baoji, in Shaanxi province, to Chengdu, Wang Yongping, a railways ministry spokesman, said by phone.China's food prices won't gain significantly in the wake of the earthquake as grain and vegetable oil supplies are sufficient, the China National Grain and Oils Information Center said in an e-mailed daily report today.Food prices, which rose 22.1 percent in April, have helped to push inflation near an 11-year high as demand outpaces farm production.Wholesale pork prices surged 46 percent in the past year, according to Shanghai JC Intelligence Co.
Aluminum, Zinc
Most damage was reported in mountainous areas in Wenchuan county, which doesn't supply food to outside regions.Chinese officials have said over recent weeks that grain stockpiles are adequate to feed the nation's 1.3 billion people and stabilize prices.A"fair amount'' of zinc smelting capacity may be temporarily closed for safety checks or because of power interruptions, said Claire Hassall, a principal at CHR Metals Ltd. who has followed the global zinc industry for more than 20 years. As much as 500,000 tons of capacity may have been affected in Sichuan, Gansu and Shaanxi provinces, Hassall said.Zinc rose 6.5 percent, the biggest gain in more than two months, to $2,326.50 a metric ton on the London Metal Exchange.Aluminum smelters reported little damage, said Wan Ling, an analyst with metals and mining researcher CRU International Ltd.The province's annual aluminum output is about 600,000 tons, Wan from CRU said by phone from Henan province. China, the world's largest producer, has a total aluminum capacity of more than 15 million tons.Sichuan Hongda Chemical Industry Co., China's third-largest zinc producer, and Chongqing Iron & Steel Co. had their shares suspended.The companies are among 66 that halted trading today until they update investors on the impact of the quake, according to a stock exchange statement.

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