For three consecutive years, the epidemic lockdown and the escalation of the trade war between China and the United States have dragged down the Chinese economy, leading to shrinking demand and a worsening crisis in the manufacturing industry. Official data shows that the electricity generation of large-scale energy enterprises recently decreased year-on-year, with industrial electricity demand remaining weak. Internal data within the coal industry and the continued decline in performance further confirm this downward trend. Behind the weakened energy demand is the ongoing wave of factory closures in industrial zones across various regions of China, posing a serious challenge to the Chinese economy.
The data released earlier by the National Bureau of Statistics of the People’s Republic of China indicates that in the first two months of this year, the electricity generation of large-scale energy enterprises in China witnessed a year-on-year decline. This trend corresponds with the operational data announced recently by the coal industry in Shaanxi for the month of April.
Data shows that in the first four months of this year, the total electricity generation and total electricity sales of Shaanxi Coal Industry both saw a significant year-on-year decrease of 20.86% and 20.85%, respectively.
Shaanxi Coal Industry is one of the major coal production enterprises in China, and its coal products are widely used in industries such as power generation, chemicals, and metallurgy. The company currently operates 10 controlled power plants, including 7 operating and 3 under construction, with the main units distributed in provinces such as Henan, Shaanxi, Shanxi, and Hunan.
Shaanxi Coal Industry explained that monthly operational data may be influenced by seasonal and incidental factors, but the company also acknowledged that the year-on-year changes in electricity generation and sales are related to overall demand and statistical adjustments. Industry analysis also confirms the pressures facing the energy sector. According to calculations by Fangzheng Securities, amid declining coal prices, the overall revenue and profits of China’s coal industry showed a year-on-year decrease in 2024.
Although the performance of leading companies such as Shenhua, China Coal Energy, and Shaanxi Coal Industry surpassed the industry average, their revenue and profits also faced varying degrees of decline.
Financial reports show that the operating income and net profit of the three major industry leaders experienced a “double decline” in 2024. As we entered 2025, the continuous decline in coal prices further intensified the pressure on the energy sector.
Statistics from Fangzheng Securities indicate that in the first quarter of this year, both the operating income and attributable net profit of the coal industry as a whole saw a significant year-on-year decline, with a 29.7% decrease in net profit.
The sluggish data on Chinese energy production, particularly the significant decrease in electricity generation, reflects a weakening momentum in China’s economic growth, posing challenges to industrial production activities.
Amid various labor strikes erupting in many places, China’s economy is facing a difficult situation.