China’s thermal power output is shrinking

For those wondering why thermal coal prices have been under pressure for the past quarter, look no further than China’s electricity ouput.

China’s electricity output increased by 2.7% yoy in August.  We knew that figure from earlier release of industrial production output.

Breaking it down, thermal power output continued to contract.  Thermal power output decreased by 6.3% yoy in August, worse than –4.5% yoy in July.

The continued contraction in thermal power output was offset by hydroelectric power output, which increased by 48% in August.

Houses and Holes
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  1. “China’s electricity output increased by 2.7% yoy in August”

    Looks like the Chinese figured out how to fudge some more numbers.

  2. You don’t bring on hydro that quickly, suggests they had a wet year and hence the increased hydro generation capability.


    Although production of hydroelectric power picks up this year, it accounts for roughly 12% of total power output so far this year according to figures published by the National Bureau of Statistics, thus it does not look likely that pick up in hydroelectric power production is going to change the overall weak picture of electricity output and consumption. And if electricity consumption is indeed a more reliable indicator for economic activities, this piece of news does not bode well for GDP growth in the near term unless dramatic policy easing is in-place.