Beijing – China’s output of electric power and steel fell for the first time in decades in 2015, while coal production dropped for a second year in row, the National Bureau of Statistics showed on Tuesday.
The bureau said only crude oil escaped the downturn, with refinery throughput hitting a new record in December and rising 3.8 percent to 10.44 million barrels per day in the year.
Xu Zhongbo, a steel industry consultant, who reacted to the data, said the sector would “be really bad for the next five years’’.
“This is because steel mills are cutting production, it cuts demand for coal and power, and coal is also hit by falling power and cement demand.
“Steel production will continue decreasing this year, especially construction steel – there are just too many apartments and many cities just don’t need to build anymore,” Zhongbo said.
China generated 5.618 trillion kilowatt-hours (kWh) of power in 2015, down by 0.2 percent from the previous year, the data showed, the first annual decline since 1968.
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“China’s economic growth has decoupled from coal-fired power generation, and the increase in the service industry as a share of China’s GDP has also slowed demand,” said Yang Fuqiang, a senior researcher at the Natural Resources Defense Council.
Yang said he expected the sector to grow at a much slower pace until 2050 as China embarks on “energy transition”, and with a thermal power capacity surplus already estimated at around 200 gigawatts.
Crude steel production dropped by 2.3 per cent to 803.8 million tonnes, the first yearly fall since 1981, with the entire sector sapped by weak demand and a colossal supply glut.
Around half of China’s steel mills are incurring losses and many are struggling to exit from a sector with a capacity surplus of around 400 million tonnes a year, half of total production.
A slowdown in construction also hurt the energy intensive cement industry, slashing output by 4.9 per cent in 2015 and creating further knock-on effects for coal and power. (Reuters/NAN)
