The extent of the slowdown in industrial production and the fall in electricity production is greater than we had initially expected in this slowdown. Industrial production slowed to 8.2% in October, the first time it has been under 10% since December 2001, if we discount the Spring festival-affected months of January and February. Electricity production fell 4% in October, following four months of sub-10% growth.
Other than the general industrial slowdown a number of specific factors are causing the fall in electricity production:
Extended Olympic shutdowns. Factories closed down because of the Olympics have been told they are not allowed to reopen until they meet certain energy and environmental standards. It would appear this is taking longer than expected.
Slowdown in energy-intensive commodity production. Partly linked to the Olympic shutdowns and partly due to energy policy, production of some commodities slowed significantly in the third quarter. October numbers are not yet out but third quarter numbers showed a sharp decline in pig iron production with a drop to -0.3% from over 8% growth in the first half. September's pig iron production fell 5% y-o-y.
Aluminium production growth has halved, from averaging 41.8% growth in the first quarter to averaging 20% growth in the third. September's growth was just 7.4%.
Coke production has slowed from an average growth of 11.7% in the first quarter to just 0.6% in the third quarter. September's coke production fell by 11.2%.
China's thermal coal prices are just 4.2% off their summer peak. We expect some of the smaller, less efficient electricity producers are unwilling to produce with such high costs. The manufacturers which relied on these producers may have resorted to using back-up generators in the meantime and hence the headline electricity production number would not have captured this production. | 
发表于 2008-11-14 08:52
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