SHANGHAI: China's power output, a bellwether for the country's economic activity, rose 4.1 percent from a year ago in September, rebounding from the sharp fall in the preceding month as industry activity rose, official data showed on Tuesday.
An output of 454.2 billion kilowatt hours (kWh) in September was, however, down 8.4 percent from 495.9 billion kWh in August, marking the second straight monthly decline driven largely by a cooler autumn weather and reduced hydroelectric generation.
"Slackening economic growth will cap the strength of a seasonal rebound in power demand in the coming winter. That will weigh on thermal coal prices," said Li Ji, a coal analyst at Galaxy Futures Brokerage.
While China's factory output rebounded in September from August's six-year low, data showed the world's second-largest economy grew only 7.3 percent between July and September from a year ago - the weakest since the 2008/09 global financial crisis.
China's thermal coal sector has been hit hard by a slowing economy, stubborn oversupply and Beijing's aggressive anti-pollution campaign that has seen gas and renewables take a growing market share in overall power generation.
Total power generation rose only 4.4 percent in the first nine months of 2014, compared with 6.8 percent from year ago, according to data from the National Bureau of Statistics, while coal use in total generation has dropped to about 78 percent this year, compared to 82 percent in 2013.
But with local coal majors announcing production cuts in August, analysts said China's coal prices, now hovering near a five-year low, may recover slightly in the fourth quarter due to seasonal restocking by power plants and Beijing's moves to curb imports.
The China Electric Council in July cut its forecast for the country's 2014 power consumption growth to between 5.5-6.5 percent, down from its February estimate of 7 percent.
China's power consumption rose 7.5 percent in 2013.
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