China’s National Bureau of Statistic’s released its monthly production figures for March. According to these, relevant production statistics showed a strong trend for GDP growth, coal consumption and steel production.
March saw Chinese electricity production follow its normal seasonal trend as 662.3bn kWh was produced, which is up 19.2% YOY and 12.3% MOM. YTD, electricity production is thus up 20.4% YOY.
Relevant for dry bulk, China’s thermal electricity production during March was 498.9bn kWh, which is up 26.6% YOY and 12.0% MOM. YTD, Chinas thermal electricity production is up 22.4% and has YTD accounted for 76% of total electricity production, which compares with the 2018 to 2020 share of 73%, 72% and 71%, respectively.
China’s domestic coal production, which has been rumored to be suffering from severe inspections following a series of accidents, rose only 3.5% YOY whilst being up 20% MOM. YTD, China’s coal production has risen by 16.9% YOY, and has thus been severely outpaced by the country’s thermal electricity production – in our view a positive for dry bulk owners, as it would suggest further pressure on Chinese coal inventories ahead of the summer peak.
During March, China’s steel production rose by 20.4% YOY and 15.7% MOM. YTD, China’s steel production has followed its usual seasonal pattern, albeit at an elevated level, and is currently up 15.6% YOY.
Pig iron production (raw material for making steel) has followed suit and reads as a strong positive for continued demand as March production figures were up 13.1% YOY and 11.0% MOM. YTD, Chinese pig iron production is up 10.6% YOY.