<article><p class="lead">China's power output increased in the first half of April as many industries resumed operations following the peak in the country's Covid-19 outbreak. The rise in power output provided some support to coal consumption, even as coal prices kept declining amid plentiful supply.</p><p>Power generation increased by 1.2pc on the year in 1-15 April, China's top economic planning agency the NDRC said, without providing an output figure. The increase reversed a year-on-year decline of 6.8pc in power output in the first quarter. </p><p>The stronger electricity output raised consumption of coal for power generation. Combined coal burn at major coastal power plants operated by Huaneng, Datang, Huadian, Zhejiang Power, Shanghai Power and Yudean averaged 555,000 t/d over 1-22 April, according to coal industry association the CCTD. This was up from the average coal burn of 514,000 t/d during the full month of March.</p><p>Restarts at more businesses and factories have lifted power consumption, with electricity use in the non-ferrous metals, pharmaceutical, electronics, chemicals, steel-making and machinery industries now reaching or exceeding year-earlier levels, the NDRC said. Railway haulage volumes have largely returned to normal, and civil aviation, ports and water transportation services are all operating normally.</p><p>The NDRC approved eight projects in March, mostly in the transportation and energy sectors, representing a total investment of 77.3bn yuan ($10.9bn). This could help boost the country's economy and raise power demand. </p><p>China's domestic coal prices have continued to decline, despite the recent rise in power output, on the back of oversupply and high utility stocks. Argus assessed NAR 5,500kcal/kg coal at Yn474.67/t ($66.88/t) fob Qinhuangdao on 17 April. The price on a US dollar basis was the lowest since 22 July 2016. The <a href="https://direct.argusmedia.com/newsandanalysis/article/2097746">floor price</a> set by major producers and their call for production cuts late last week failed to raise spot prices this week. Bids for NAR 5,500kcal/kg coal were at around Yn472-474/t fob north China ports, with offers at around Yn478-485/t fob.</p><p>The recovery in power output comes after the Covid-19 pandemic took a heavy toll on China's economy, cutting GDP by 6.8pc in the first quarter in the first decline on record. China is recovering from the pandemic, but the spread of the virus in other countries may curb its exports and in turn limit power demand.</p></article>
