China’s economy has been on a significant turnaround since the start of March, with this turnaround also intensifying during the last several months. It has remained the view of the analysts at Commodore Research & Consultancy that the turnaround in the Chinese economy has not been getting enough global attention, however, and that expectations for the dry bulk shipping market and commodity markets earlier this year were too low. Recent months have seen very large increases in dry bulk shipping rates and commodity prices, and those aware of just how well China’s economy has been doing this year have been able to profit greatly recently.
One area where the turnaround in China’s economy has been particularly noticeable has been electricity production. Most recently, Chinese electricity production totaled 487.6 billion kilowatt hours in October, which marked a year-on-year jump of 9%. Each the last four months have now seen China’s electricity production grow year-on-year by at least 8%, with the strength coming due in part to ongoing strengthening in China’s overall economy and a rebound in industrial production. In comparison, the first six months of this year saw China’s electricity production grow year-on-year by only 2%.
Regarding the shipping market specifically, what has been particularly noteworthy recently has been the strength in China’s coal-derived electricity production (and demand for coal imports). Most recently, coal-derived electricity production totaled 355.5 billion kilowatt hours in October, which marked a year-on-year jump of 14%. A very impressive climb in China’s coal-derived electricity production growth has been seen during the last four months, and total coal-derived electricity production during September and October in particular marked a year-on-year increase of 15%. In comparison, the first six months of this year did not see any year-on-year growth in China’s coal-derived electricity production.
Overall, China’s economy has been on a significant turnaround since the beginning of March, and both overall electricity production and coal-derived electricity production have seen very impressive growth during recent months. This has remained beneficial to the shipping market, and is telling of just how strong China’s economy has been in the last several months. At present, the Chinese economy is much stronger than it was last year and also much stronger than was seen during the first two months of this year. The great strength being seen in China remains very encouraging.
From 《Shipping Freshmaker》 Dec 1, 2016