China’s March power consumption falls

China's power consumption for March has fallen on weaker demand from the manufacturing and services sector even as household use rose, suggesting that the nation's economy is still struggling to recover from the impact of the Covid-19 pandemic.

Total power consumption for China in March was 549.3 TWh, a drop of 4.2pc from March 2019, according to National Energy Administration data. China's agriculture sector and households consumed 4pc and 5.3pc more power respectively for March on the year, but this was offset by lower consumption in the manufacturing and services sector, which dropped by 3.1pc and 19.8pc respectively on the year, reducing overall power consumption levels.

China's economy shrunk by 6.8pc on the year during January-March, the first decline in nearly 30 years as the virus pandemic caused business shutdowns, according to the national bureau of statistics. At least 460,000 Chinese firms closed during the first quarter of 2020 and have not reopened, corporation registration data revealed, suggesting many of the closures could be permanent.

Adding to China's economic woes is the potential exodus of Japanese manufacturing firms from the country as Japan set aside a $2.2bn fund to help Japanese production lines relocate out of China in a bid to minimise supply chain disruptions caused by the pandemic. The US is understood to be considering a similar move, which could further undermine China's industrial demand for coal.

China's combined daily coal burn at the six flagship coastal utilities has remained stubbornly weak for the past few weeks, recording 569,400t/d on 19 April. This would deplete existing stockpiles in 29 days, which is longer than the 20-25 days that indicate healthy coal consumption. Much of China's industries are situated in the coastal regions.

By Kelvin Leong

source: Argus Media