As we discussed in a client note on Tuesday, China's coal production totaled a record 417.2 million tons last month. This has marked an increase of 50.1 million tons (14%) from February and is up year-on-year by 21.4 million tons (5%). As we have been stressing in our Weekly China Reports, the central government last year was no longer primarily focused on improving mine safety and instead shifted its focus to ensuring robust coal production. Coal production has remained robust this year even as new coal mine accidents and deaths have continued to occur.
Also discussed was how China's electricity production totaled 717.3 billion kilowatt hours last month. This has marked an increase of 42.4 billion kilowatt hours (6%) from February and is up year-on-year by 47.1 billion kilowatt hours (7%). Thermal coal-derived electricity generation, which makes up the bulk of China's electricity production, totaled 514.6 billion kilowatt hours. This has marked an increase of 26.7 billion kilowatt hours (6%) from February and is up year-on-year by 45.8 billion kilowatt hours (10%).
New is that thermal coal-derived electricity generation grew year-on-year by more than coal production grew. Previously, coal production growth had exceeded thermal coal-derived electricity generation growth during fourteen of the prior sixteen months. Part of the reason why thermal coal-derived electricity production growth was so strong last month is because hydropower production has stayed very weak.
China's hydropower production totaled only 68.4 billion kilowatt hours last month. This is the same amount that was produced in February and is down year-on-year by 12.1 billion kilowatt hours (-15%). China's hydropower production has now contracted on a year-on-year basis during seven of the last eight months, and last month's 15% year-on-year contraction marked the largest since October. As we have highlighted in our research, water inflows have been low. A full breakdown of China's electricity production will be included in Commodore's next weekly client report.
