China's Power Consumption Back To Growth Status

---

Researched by Industrial Info Resources (Sugar Land, Texas)--China's power consumption returned back to growth in February 2009. As of February 20, 2009, power consumption in China increased 15% year over year, or 13.2% compared with the previous month, Premier Wen Jiabao disclosed in an online forum on March 1, 2009. China's power consumption dropped for the first time after 10 years of growth in October 2008 and continued to fall for four successive months until January 2009. Power consumption often reflects changes in economic conditions. Many experts believe that the resumption of growth in power consumption indicates that industrial production started to shift toward a better position.

According to the data of the State Power Dispatching Center, in January 2009 China's power consumption continued to fall in all parts of China except for the the Guizhou, Tibet, Xinjiang and Hunan provinces. The drop in Shaanxi, Zhejiang and Guangdong was more than 20% year over year.

In the beginning of February 2009, power consumption in Zhejiang, Guangdong and Hebei had obviously resumed, with maximum growth rates reaching 30%. Insiders believe that the growth in Hebei, the largest steel producer in China, was the result of an increase in steel production. However, the growth of power consumption in Zhejiang and Guangdong is still hard to determine as being caused by an economic recovery that can be maintained or if the growth could simply have been caused by the resumption of labor after the Chinese New Year.

Because of the impact of the Chinese New Year, power generation in January 2009 dropped 13.1% year over year. In addition, despite the growth in February, the cumulative power output from January to February 20 was 4.1% less year over year. Compared with the data in February, the cumulative data should be of more valuable. The rebound of power consumption in February was the result of these enterprises trying to fill their inventories as stocks were reduced during the stopping of production in previous months. "Growth in power consumption driven by such factors might be maintained to the middle of March only. Whether the increasing stockpile can be sold or not depends on the market situation," said a power industry analyst.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.