China power output down for second straight month due to slack growth
Slowing economic growth blamed for decline in supply for second month in a row
The mainland's power output, a bellwether for its economic activity, dropped for the second consecutive month as slack economic growth capped a seasonal rise in demand.
The output of 454.2 billion kilowatt-hours last month was down 8.4 per cent from 495.9 billion kWh in August, marking the second straight monthly decline driven largely by cooler autumn weather and reduced hydroelectric generation.
"Slackening economic growth will cap the strength of a seasonal rebound in power demand in the coming winter. That will weigh on thermal coal prices," said Li Ji, a coal analyst at Galaxy Futures Brokerage.
While mainland factory output rebounded from August's six-year low, data showed the world's second-largest economy grew only 7.3 per cent in the past three months from a year ago - the weakest since the 2008-09 global financial crisis.
The mainland's thermal coal sector has been hit hard by a slowing economy, stubborn oversupply and Beijing's aggressive anti-pollution campaign that has seen gas and renewables take a growing market share in overall power generation.
Total power generation rose only 4.4 per cent in the first nine months of the year, compared with 6.8 per cent from a year ago, according to data from the National Bureau of Statistics, while coal use in total generation has dropped to about 78 per cent from 82 per cent last year.
But with local coal majors announcing production cuts in August, analysts said the mainland's coal prices, now hovering near a five-year low, might recover slightly during this quarter due to seasonal restocking by power plants and Beijing's moves to curb imports.
Power consumption rose 7.5 per cent last year.
