Oil / Commodities - China’s electricity output plummeted last month as virus restrictions in Shanghai and other parts of the country pummelled economic activity from factory floors to steel mills and shopping malls. Electricity generation fell in April from March to 608.6 billion kWh, a decline of 4.3% on the same period last year. thermal power output plunged to an even greater degree, down 12% for the biggest drop since 2008, as the share of renewables increased at the expense of coal and gas and China installed more solar capacity than expected in the first quarter. The moderation in China’s appetite for fossil fuels has come at an opportune time for the world’s biggest energy importer, as well as global markets contending with higher prices resulting from the war in Ukraine. The lower requirement also saw domestic coal, gas and crude output ease from the highs hit in March. But cratering industrial activity has put China’s growth target for the year even further out of reach, and among commodities, both steel output and oil refining have been hit hard. Steel production is still 5.2% lower on year in April, while refining activity fell sharply on both measures due to strict mobility restrictions. Aluminum, however, notched a fresh record high as smelters ramped up output to tap elevated margins after the surge in prices following Russia’s invasion of Ukraine.
Newsletter - May 16, 2022
Newsletter - May 16, 2022
Newsletter - May 16, 2022
Oil / Commodities - China’s electricity output plummeted last month as virus restrictions in Shanghai and other parts of the country pummelled economic activity from factory floors to steel mills and shopping malls. Electricity generation fell in April from March to 608.6 billion kWh, a decline of 4.3% on the same period last year. thermal power output plunged to an even greater degree, down 12% for the biggest drop since 2008, as the share of renewables increased at the expense of coal and gas and China installed more solar capacity than expected in the first quarter. The moderation in China’s appetite for fossil fuels has come at an opportune time for the world’s biggest energy importer, as well as global markets contending with higher prices resulting from the war in Ukraine. The lower requirement also saw domestic coal, gas and crude output ease from the highs hit in March. But cratering industrial activity has put China’s growth target for the year even further out of reach, and among commodities, both steel output and oil refining have been hit hard. Steel production is still 5.2% lower on year in April, while refining activity fell sharply on both measures due to strict mobility restrictions. Aluminum, however, notched a fresh record high as smelters ramped up output to tap elevated margins after the surge in prices following Russia’s invasion of Ukraine.