Chinese power consumption decreased to 574.4TWh in September, down 11.9% m-o-m but still was 8% higher y-o-y. Industrial power consumption fell to 362.3TWh last month, down 11.8% m-o-m but still was 7% higher y-o-y.
This closely correlates with the fall in Chinese official manufacturing PMI, which fell to 50.8 points in September, down from 51.3 points reported in August and is the second lowest since September 2016 when the PMI fell to 50.4 points. Similarly, Caixin manufacturing PMI fell to near stagnation level at 50 points last month. This is the lowest level since May 2017.
Chinese industrial sector is clearly feeling the pinch of the US import restrictions introduced by the Trump administration. Just last week, the Chinese Ministry of Commerce has launched an official complaint to the WTO about the US tariffs on the import of steel and aluminium, which it calls protectionist.
Moreover, fall in the GDP to 6.5% in Q318 sparked an immediate reaction from Chinese vice-Premier responsible for the economy, Liu He, trying to reassure the investors.
Power consumption at the tertiary and residential sector also fell as the usage of air-conditioners is falling due to cooling temperatures, which fell to 20 degrees in mid-September, down from 30 degrees in mid-July.
The heating season in China has not yet started. However, coal stocks at Chinese thermal power plants are rising amid preparations for the winter season.
China consumed 5,106TWh of electricity over the first 9 months of the year, up 8.9% y-o-y. Industrial sector consumed 3,057TWh, up 7.2% y-o-y. While power consumption at the tertiary and residential sectors increased to 825.9TWh and 753.4TWh respectively, up 13.5% and up 11.5% y-o-y.
Source: NEA, CEC, CFPF, NBS, Caixin