China Power Firms Face Worst Margins Since ‘06: Chart of the Day
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Chinese power plants face the smallest profit margins in at least five years as government-mandated caps on electricity prices prevent utilities from passing along coal-price increases.
The CHART OF THE DAY shows the cost of coal in yuan per metric ton as a percentage of what three benchmark plants in the cities of Taicang, Changshu and Chaozhou can charge on average for their power supplies. Fuel expenses are 95.5 percent, exceeding the proportion in 2008, when record coal prices contributed to blackouts in China, according to data from Sanford C. Bernstein & Co. The lower panel shows year-on-year gains in China’s consumer price index.