标题: Our comments about the rumor of China power generation growth in October. [打印本页] 作者: NYboy 时间: 2008-11-10 14:16 标题: Our comments about the rumor of China power generation growth in October.
Event:
It is rumored that power generation growth might decline 0.46% YoY in October, though the National Bureau of Statistics and China Electricity Council have not released the official data.
Our Comments:
We believe the October power generation growth might still be in a downtrend, mainly due to the declining power consumption and output of the downstream sectors like ferrous metal, chemicals, nonferrous metal and nonmetal. The October power generation may even suffer a negative growth against the backdrop of significant decrease in outputs of these sectors. In the long term, the monthly power generation growth should stabilize as the sharp decline of generation growth and capacity shutdowns for major downstream power consumers are not normal.
1. Ferrous metal, chemicals, nonferrous metal and nonmetal consume 12%, 9%, 8% and 6% of total power in China. The consumption decline for these sectors also drags the power consumption by the power generators (14%). These are the main culprits of the downtrend of monthly power generation. Compared with the situations in September, the shutdowns of some capacities for these sectors have not improved significantly. In our view, this is the primary culprit of the anemic growth in October power generation. According to our communications with relevant sector analysts, the October outputs have not been announced so far. Therefore, we can not deduce the real situation of October power generation based on the performance of downstream sectors.
2. The power generation growth refers to the growth in gross power generation, thermal power generation and hydraulic power generation. Gross power generation is directly correlated with the power consumption of the real economy. In summer, hydraulic power generation should seize more market shares, and the thermal power generation may be dampened.
3. Historically, October power consumption always declines 1~2ppt MoM as October is a typical dull season of power consumption. However, November and December power consumption may increase MoM given the heating season in winter.
