China Early June Power Output Drop Narrows from May

飞雪寒冰

China's daily average power output fell 0.2 percent year-on-year in the first 10 days of June, narrowing from a 3.5 percent decline in May, according to data from the State Grid Distribution Center.

Power output in eastern and southern coastal areas rebounded sharply, with production up 11 percent in the export manufacturing hub of Guangdong province, the first rise following several months of decline.

Power production in Zhejiang and Shanghai was down 3 and 1.6 percent respectively, narrowing after a series of double-digit falls since the beginning of the year.   

However, power output in the coal mining centers of Shanxi province and the Inner Mongolia autonomous region remained weak, falling 2.8 and 6.4 percent respectively.

"With steel and alumina production increasing, falls in the country's power output are likely to narrow and may even rise in the second half," a power analyst with the China Electricity Council told Caijing.

飞雪寒冰

However, China Iron & Steel Industry Association secretary general Shan Shanghua said earlier that small Chinese steel mills were fully prepared to cut production if talks over iron ore contract prices with global miners do not reach a resolution. Chinese steelmakers are holding out for a price cut of at least 40 percent after rejecting a deal between Nippon Steel and Rio Tinto widely accepted by global players as an industry benchmark.  

China's power consumption is expected to rise 4 to 5 percent this year as the economy recovers, the National Energy Administration said earlier.

Power generation and consumption figures are closely watched as a gauge of industrial activity and tend to reflect the strength or weakness of the overall economy after exports collapsed in 2008.

The International Energy Agency has claimed that China's first-quarter economic growth rate of 6.1 percent may be inaccurate because it was inconsistent with a 3.5 percent decline in the demand for oil and weaker power consumption statistics. China's National Bureau of Statistics has dismissed this analysis as "groundless" and "lacking in seriousness" because the IEA did not consider the whole energy consumption picture.