China’s energy and commodities output roared ahead in March as producers rushed to feed a revival in economic activity.
The increases, which included records for a single month’s data for coal mining, natural gas output and oil refining, broadly tally with a robust set of import figures last week. But it’s clear that for many markets the additional supply is running ahead of actual consumption in what’s proving to be an uneven recovery. Underpinning the gains was a surge in power demand as electricity generation climbed 5,1 percent on year, according to the statistics bureau on yesterday.
China’s reopening after the constraints of Covid -19 Zero saw the economy grow 4,5 percent in the first quarter, handily beating expectations but short of Beijing’s 5 percent annual target. Property investment continued to contract, a warning sign given the sector’s importance to commodities markets. Retail sales in March shot higher while industrial production missed expectations.
The steel market in particular is heavily keyed to indications of building activity, especially ahead of the busy season for construction in the second quarter. Output in March rose 6,9 percent on year to 95,7 million tonnes, near a two-year high, although this is one of the markets where demand has so far disappointed.
Oil processing rose 8,8 percent to 63,3 million tonnes, an all-time high for a single month’s data, as refiners lifted runs to feed post-Covid-19 transport demand, although a recent pullback in diesel consumption tied to trucking is another indicator of China’s patchy recovery.
Crude oil drilling, meanwhile, topped 18 million tons for the first time since 2015.
Source | Bloomberg