One of this Bystander’s irregular indicators of economic growth, coal stocks, suggest that the slowdown in China’s economy has yet to bottom out. State media report that the piles of coal sitting at the main coal ports of Qinhuangdo, Tangshan and Huanghua were at record levels at the end of last month, at 18.3 million tonnes between them. A month earlier, they had reached 16 million tonnes.
At Qinhuangdo, China’s main coal port, stocks have fallen from 8.9 million tonnes to 8.6 million tones. Yet as maximum capacity there is 9.2 million tonnes what coal that is needed will likely have been taken from there first. Tangshan is also bumping up against its maximum storage capacity.
Overall the country has 300 million tonnes of coal in reserve, equivalent to at least a month’s consumption. Some 75% of China’s electricity is generated by coal-powered plants and power generation accounts for two-thirds of China’s thermal coal consumption. Electricity consumption, another of our irregular economic indicators, grew by 5.8% in the first five months of the year, down from 12% in the same period a year earlier. Other big coal users, including steel and cement makers, have also seen their businesses slow. The coal industry is now expecting the slow down in demand to continue into the third quarter, despite it usually being the peak months for power consumption.