Activity in China's manufacturing sector unexpectedly expanded at the fastest pace in nearly 5 years in March, adding to evidence that the world's second-largest economy has gained momentum early this year as construction booms.

But while factory output accelerated and new orders from home and abroad improved, economists are increasingly questioning how long China's solid growth can be sustained.

Over a dozen cities have announced fresh measures in March to cool the overheated property market, while the export outlook is threatened by U.S. President Donald Trump's protectionist rhetoric.

For now, though, China's factories appear to have shifted into higher gear, encouraged by the strongest profit growth in six years.

China's official Purchasing Managers' Index (PMI) rose to 51.8 in March from the previous month's 51.6, data showed on Friday.

That was the strongest reading since April 2012 and well above the 50-point mark that separates growth from contraction on a monthly basis. Economists had expected 51.6.

Manufacturers also stopped shedding jobs in March for the first time in nearly five years as profitability improved. A prolonged slump in the sector and Beijing's recent campaign to cut excess capacity in "smokestack" industries such as steel have put millions out of work.

In an encouraging sign that China's economic growth is also becoming more balanced and broad based, activity in the services sector accelerated last month. The official non-manufacturing Purchasing Managers' Index (PMI) rose to 55.1, the highest since May 2014, a separate survey showed.

The March activity readings and a raft of upbeat data for January and February point to solid growth early in 2017.

China's economy likely expanded 6.8 percent in the first quarter from a year earlier, in line with the previous quarter, said Zhang Yiping, an economist at Merchants Securities.

Analysts polled by Reuters in January had expected growth would start to cool this quarter, and even the government has set a less aggressive full-year growth target of 6.5 percent.

UNSUSTAINABLE GROWTH?

China's better-than-expected performance so far may be largely due to a surprise rebound in home sales and strong government infrastructure investment, which have added fresh impetus to a months-long construction boom that has lifted demand for materials from cement to steel.

Factory output accelerated in March, with the sub-index rising to 54.2 from 53.7 in February. Highlighting the strength of the building boom, a measure of the construction industry stood at a robust 60.5, compared to 60.1 in February.

Total new orders -- which cover domestic and export demand -- also showed improvement, rising to 53.3 from February's 53.

But economists continue to have worries.

Apart from additional government curbs on property purchases, the central bank has embarked on cautious policy tightening to rein in the risks from a rapid build-up in debt.

It has raised money market and short- and medium-term interest rates on special loans several times already this year.

"Today's PMI readings suggest that China's economy continued to perform well in March, though we doubt the current strength will be sustained for much longer," Capital Economics said in a note.

"The correction in the property market still has much further to run which, in combination with policy tightening, will drive a slowdown in investment and industrial activity during the coming quarters."

The construction rally may already be starting to show signs of fatigue, said Jonas Short, Head of Beijing Office of investment bank NSBO, pointing to a drop in new construction orders to the lowest since August 2016.

Inventories of iron ore at China's ports have swelled to the highest since at least 2004, by some estimates, also suggesting the risk that supply is beginning to outpace demand.

"We are concerned that this build-up in inventories in sectors such as steel is not going to be translated into end-user demand," Short said.

Sharp gains in producer prices in recent months may also be losing their oomph, pointing to weaker profit growth ahead for the industrial sector.

"The rally in China’s producer prices is reaching the limit...As prices start to ease, buyers will likely halt new orders and hence overall business momentum will slow," analysts at ANZ said in a note.

Indeed, China's iron ore futures prices fell nearly 2 percent on Friday and were set for a monthly drop of 13 percent on worries about surging stockpiles. [IRONORE/]

TRUMP FEARS OVERSHADOW STRONG DATA

Asian financial markets were largely unfazed by the buoyant China data as investors' attention turned to the first meeting between Trump and Chinese President Xi Jinping next week.

Trump foreshadowed the risk that those talks could be tense, tweeting on Thursday that the United States could no longer tolerate massive trade deficits and job losses.

The U.S. Commerce Department said earlier that Beijing must change its trade practices and the way its state enterprises operate.

Trump's recent meeting with German leader Angela Merkel "revealed he's willing to give bad meetings. A bad meeting with President Xi would raise the prospect of a trade war, which would be a global risk-off event," ING's chief Asia economist Tim Condon said in a note

http://www.reuters.com/article/china-economy-pmi-idUSL3N1H63NO

China Shenhua Energy Co., Ltd and Datang International Power Generation Co., Ltd were encouraged by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) to discuss the possibility of regrouping, in order to further optimize the industry structure, sources said.

The discussion is still in preliminary stage, so it remains unknown whether the regrouping is to be carried out or not.

China Shenhua said they had not yet been informed of it, and they would release a relevant statement if informed.

China Shenhua Energy Co., Ltd is the listed arm and core asset of the state-owned Shenhua Group, while Datang International Power Generation Co., Ltd is a listed arm of the state-owned China Datang Group. The regrouping only between two listed arms of state-run firms is unprecedented in China.

According to its annual report released on March 18, China Shenhua realized net profit of 22.7 billion yuan ($3.29 billion) in 2016, and announced to provide 59 billion yuan of dividend to shareholders. The move, coupled with frequent personnel adjustments lately, aroused regrouping expectations in coal industry.

With the deepening of coal capacity cuts, relevant authorities repeatedly stressed the necessity of the industry's regrouping, and state-owned coal enterprises are likely to accelerate steps in this regard.

China Datang Group, one of the top five power producers in China, reported total profit of 17.32 billion yuan in 2015, and its installed power capacity stood at 127.2 GW, data showed.

Power is also one of the six major businesses of China Shenhua. The company's Chairman Ling Wen said the clean development of coal for power generation will be one of the priorities.

http://www.sxcoal.com/news/4554173/info/en

Australian authorities told 40,000 people to evacuate to higher ground on Thursday as a storm system generated by a powerful cyclone that pummeled the northeast two days ago swept down the coast with heavy rain.

Cyclone Debbie hit as a category four storm in the north of tropical Queensland state on Tuesday, smashing tourist resorts, bringing down power lines, flattening canefields and shutting down coal mines.

Driving rain fell most heavily on Thursday in hinterland and coastal areas either side of the state capital, Brisbane.

"This severe weather system that began with Cyclone Debbie and is tracking down the coast is causing havoc across our state," Queensland Premier Annastacia Palaszczuk told reporters in Brisbane.

The cyclone was downgraded to a tropical low depression on Wednesday but on Thursday was driving squalls with torrential rain across a 1,200-km (745-mile) stretch of Australia's east coast, swelling rivers, causing flash floods and prompting authorities to tell 40,000 people to evacuate.

In Lismore in the north of neighboring New South Wales state, the State Emergency Service order 7,000 residents in low-lying areas to leave after forecasts predicted the town's worst flood in nearly 20 years.

A levee protects the rural hub in the Northern Rivers region of New South Wales, home to at least 25,000 people, but most of those downtown planned to seek higher ground, Geoff Baxter, a barman at the Richmond Hotel told Reuters.

"We're clearing out the pub, mate, and closing it up. All the shops got closed, everyone's clearing up their cellars," he said.

Further north, Queensland closed more than 2,000 schools as sustained heavy rainfall brought flash floods to the Gold Coast tourist area and Mackay further north.

In the cyclone-hit zone further north still, military helicopters, ferries and planes brought hundreds of holidaymakers stranded on resort islands in the storm's path to the mainland, where tens of thousands more people were without power.

Resorts along the world-famous Great Barrier Reef and the Whitsunday coast bore the brunt of the storm with wind gusts stronger than 260 kph (160 mph).

"It's kind of chaos down here," Jon Clements, an architect awaiting evacuation from Hamilton Island, told Reuters. "I think there's probably three times the number of people they can put on aeroplanes at the moment down there."

At nearby Daydream Island, where water supplies had run low since the storm, troops brought food, fuel and water while helicopters carried sick guests to the mainland.

The resort will be closed for at least a month for repairs, management said in a statement, as tourism operators statewide reported canceled bookings and anticipated a long-term hit to trade.

"That's the kind of collateral damage we suffer sometimes in our industry," Queensland Tourism Industry Council chief executive Daniel Gschwind told Reuters.

In the Bowen Basin, the world's single largest source of coal used to make steel, major miners Glencore and BHP said they were still assessing the extent of any disruption to shipments.

All four coal rail networks run by operator Aurizon were closed, alongside its road and rail operations from the Bowen Basin to Brisbane. Ports at Abbot Point, Hay Point and Mackay also shut, but did not report extensive damage.

Of the smaller miners, Yancoal had called force majeure on its Middlemount mine.

http://www.reuters.com/article/us-australia-cyclone-idUSKBN17030E

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Attached Files

Eastern China's Anhui province saw its power output up 18.3% year on year to 18.25 TWh in February, data showed from Anhui Energy Administration.

Anhui produced 38.73 TWh of electricity over January-February, up 3% from the preceding year. Of this, hydropower and thermal power amounted to 830 GWh and 36.66 TWh, increasing 15.6% and 1.2% from the year-ago level, respectively.

During the same period, the province consumed 29.69 TWh of electricity, climbing 5.3% from the year prior. Of this, 13.98 TWh of electricity was consumed in February, jumping 15.4% year on year.

Residential segment consumed 5.46 TWh of electricity in February, a rise of 6.2% from a year ago.

For non-residential segment, the primary industries – mainly the agricultural sector – used 290 GWh in February, up 17.3% from the year-ago level.

During the same period, the secondary industries – mainly the industrial sector -- consumed 19.14 TWh, increasing of 4.2% year on year.

Power consumption by tertiary industries – mainly the service sector – witnessed a yearly increase of 8.2% to 4.79 TWh in February.

As of end-February, Anhui had an installed power generation capacity of 58.25 GW. Of this, thermal power capacity stood at 49.21 GW; capacity of wind power amounted to 1.82 GW; that of hydropower reached 3 GW; others at 4.22 GW.

From January to February, utilization of power generating units averaged 644 hours, 65 hours less than a year ago.


Of this, hydropower plants logged average utilization of 280 hours, an increase of 33 hours from the year prior; the average utilization of thermal power plants decreased 52 hours on the year to 740 hours.

http://www.sxcoal.com/news/4554194/info/en

Indian mining company Vedanta Resources Plc said on Thursday it has extended CEO Tom Albanese's contract by five months until the end of August.

The three-year contract was due to expire on Friday.

Vedanta's executive chairman Anil Agarwal is leading the succession process to identify candidates to replace Albanese, the company said.

Vedanta was hit by the slump in commodities prices. Its revenue fell 16.6% last year to 10.7-billion pounds ($13-billion), its lowest in six years, while profit before tax, excluding special items, plunged 79.5%.

Vedanta's shares have fallen 12.4% since Albanese, the former head of Rio Tinto Plc , took the helm in April 2014.

http://www.miningweekly.com/article/vedanta-extends-ceo-tom-albaneses-contract-by-five-months-2017-03-30

GE Energy Connections has completed the first phase of a project to bring reliable electricity to India.

The Champa Ultra High Voltage Direct Current project is intended to connect 46 per cent of India’s population to efficient energy.

It is the first 800 kV scheme in the world to use dedicated metallic return conductors, which GE says eliminates the need for ground electrodes and increases the system’s reliability.

Led by Power Grid Corporation of India, the project will connect thermal power produced in Chhattisgarh in the central-eastern part of the country to the north via Kurukshetra, via a 1365 km energy highway.

Executed in two phases, the project will transport 6000 MW of power upon full completion. Both phases comprise two poles, each with the capacity to transmit 1500 MW.

Now GE has announced it has completed the first of these phases and successfully transmitted 1500 MW of power.

 “When we help turn the lights on for India’s northern region, we are improving the lives of over half a billion people,” said Reinaldo Garcia, president for Grid Solutions at GE Energy Connections.

http://www.powerengineeringint.com/articles/2017/03/ge-completes-first-phase-of-huge-india-grid-project.html