Business cycle
According to the Business Cycle Clock (BCC) in October 2011, the value of construction complete and the number of employed persons are indicating an upward trend. Imports and the business survey index are in the slowdown phase.
Industrial production, service industry activity, retail sales, equipment investment, and exports are on a downward trend, while the consumer expectation index is in a recovery phase.
Compared to September, the value of construction complete, number of employed persons, and consumer expectation index slightly went up.
In contrast, imports, the business survey index, industrial production, service industry activity, retail sales, equipment investment, and exports dropped.
From January through October 2011 (in terms of the total), primary energy consumption tentatively reached 221.3 million TOE, a year-on-year rise of 3.3%.
From January through October, primary energy consumption indicated a gradual increase in tandem with a slight slowdown in economic growth, despite the record- breaking cold wave (a 5.4℃drop from average year temperatures) in January.
- In the first quarter, Korea recorded a growth rate of 4.2%, which was close to the potential growth rate. However, the economy’s level of growth slowed down to the mid-3% range in the second quarter and onwards.
- Energy consumption for industrial use led a rise in primary energy consumption from January through October as a result of continued favorable conditions in industrial production.
* Economic growth rate by quarter in 2011: (First quarter) 4.2% →(Second quarter) 3.4% →(Third quarter) 3.5%
Trends in primary energy consumption
2
* Industrial activity (industrial production) from January through October 2011: Year- on-year growth of 7.4%
- The rate of increase in energy consumption was higher than the economic growth rate from the second quarter of 2009 through the fourth quarter of 2010. However, the relationship between the two indexes tended to take a twist in 2011.
Notes: Values for the fourth quarter of 2011 are forecasts.
[FigureⅡ-2] Recent economic and primary energy consumption trends
Notes: Values in parentheses refer to the year-on-year growth rate (%); p refers to tentative figures.
Despite the simultaneous onset of major factors that trigger a rise in energy consumption in the first quarter of 2011, such as an upswing in the economy and abnormally low temperatures, energy consumption rose relatively gradually (3.8%).
* In the first quarter of 2011, the average temperature (-0.8℃) dropped 1.2℃year-on-year.
- This is assessed to be a result of base effects from the high level of increase recorded in the same period of the previous year (11.2%), a soar in international oil prices, and energy-saving policies, including the measure on placing restrictions on heating temperatures in buildings.
Category
2010 2011p
1/4 2/4 3/4 4/4 Annual 1/4 2/4 3/4 October January~October
<TableⅡ-3> Primary energy consumption trends
30.7 27.9 30.3 30.5 119.3 30.4 28.8 32.2 11.1 102.5
(22.9) (11.2) (3.8) (4.5) (10.1) (-0.8) (3.1) (6.4) (12.1) (3.8)
23.3 21.7 24.5 24.3 93.8 24.2 22.3 25.8 8.8 81.1
(14.3) (7.0) (3.6) (4.2) (7.0) (3.7) (2.6) (5.6) (11.8) (4.8)
198.8 193.5 191.8 210.3 794.3 205.0 181.5 199.3 66.3 652.1
(-0.2) (0.5) (4.4) (3.5) (2.0) (3.1) (-6.2) (4.0) (0.3) (0.3)
117.6 111.3 108.8 124.7 462.5 116.3 97.7 108.7 36.7 359.3
(0.0) (-1.0) (3.9) (3.1) (1.4) (-1.2) (-12.3) (-0.1) (-5.1) (-4.5)
11.0 6.7 5.7 9.7 33.1 12.2 7.3 6.3 2.5 28.3
(28.8) (45.0) (24.7) (16.0) (26.8) (11.3) (9.1) (10.3) (7.9) (10.2)
1.2 1.6 2.3 1.4 6.5 1.6 1.9 3.4 0.4 7.2
(47.9) (10.5) (-8.0) (55.7) (14.7) (27.2) (21.4) (44.5) (-19.1) (28.5)
36.0 36.5 37.5 38.5 148.6 37.5 38.6 38.2 12.0 126.3
(-1.6) (-2.3) (0.9) (5.4) (0.6) (4.0) (5.8) (1.7) (-4.9) (2.9)
1.5 1.5 1.5 1.5 6.1 1.5 1.5 1.5 0.6 5.1
(14.9) (14.4) (20.1) (-3.3) (10.7) (2.9) (0.8) (-3.9) (18.3) (1.7)
69.5 61.6 61.8 69.7 262.6 72.2 61.9 65.1 22.2 221.3
(11.2) (8.2) (6.2) (6.1) (7.9) (3.8) (0.5) (5.3) (4.2) (3.3)
54.0 46.8 47.1 54.4 202.3 56.4 46.6 49.0 16.8 168.8
(10.4) (8.0) (6.6) (6.6) (7.9) (4.6) (-0.3) (4.0) (2.7) (2.8)
Coal (Million ton)
-Excluding coking coal
Oil (Million bbl) -Excluding naphtha
LNG (Million ton)
Hydro (TWh) Nuclear power
(TWh) Other (Million TOE) Primary energy (Million TOE) Primary energy -Excluding
for raw materials
* Measure on placing restrictions on heating temperatures in buildings (January 24 - February 18): A total 441 large buildings were made to keep heating temperatures at 20℃or lower.
* Emergency energy-saving measure (February 27 and onwards): Restrictions were placed on outdoor lighting of 2,603 public facilities and the license plate rationing system was implemented.
* A 32% rise in average Dubai oil prices ($/bbl): (First quarter of 2010) 75.90 →(First quarter of 2011) 100.44
Primary energy consumption recorded a year-on-year increase of a mere 0.5% in the second quarter, but posted relatively high growth of 5.3% in the third quarter.
- The major cause of the slowdown in the level of increase in energy consumption in the second quarter is assumed to be reduced consumption (-7.3%) of gasoline and diesel for transport in the second quarter in tandem with oil companies’ policy on adjusting the supplied volume.11)
- It is presumed that oil companies reduced the volume supplied to gas stations from early April through early July with the reduction in prices of gasoline and diesel for
[FigureⅡ-3] Trends in Dubai spot oil price
transport (100 won/ℓ) during the same period.
- In the third quarter, after price reductions came to an end, consumption of gasoline and diesel for transport rose 4.6% year-on-year and contributed to a rise in the level of increase in primary energy consumption in the same period.
Level of contribution of each factor that led to an increase in primary energy consumption from January through September 201112)
Regarding the level of contribution of each factor that led to a rise in primary energy consumption from January through September 2011, the level of contribution of economic growth reached 112.7%. The level of contribution of the temperature effect was also high at 20.9%.
The level of contribution of economic growth to a rise in primary energy consumption is estimated at 3.6%p (7.0 million TOE).
- It is assumed that primary energy consumption would have recorded a year-on-year increase of 3.6% from January through September 2011 as a result of economic growth if there were no changes in other factors that trigger a change in consumption such as temperature and energy efficiency improvement.
The temperature effect contributed 0.7%p (1.3 million TOE) to a rise in primary energy consumption.
- It is assumed that energy consumption rose 0.7% from January through September as a result of a year-on-year drop in the average temperature in the first quarter, including the record-breaking cold wave in 48 years that took place in January 2011.
- The amount of increase in consumption triggered by the temperature effect reached 1.3 million TOE.
11) Oil supply and demand statistics are supply statistics. For this reason, they may not reflect actual consumption based on inventory changes. It is assessed that this led to a reduction in consumption of oil for transport.
12) GDP is announced by quarter. For this reason, an analysis of the level of contribution made to a rise in consumption is limited to January through September.
* Average temperature in the first quarter: (Year 2010) 0.4℃ →(Year 2011) -0.8℃; Increase of 6.9% in HDD
* Average temperature in January: (Year 2010) -4.5℃ →(Year 2011) -7.2℃; Increase of 11.9% in HDD
In contrast, energy consumption went down 1.1%p (2.1 million TOE) as a result of changes in other factors such as energy efficiency improvements and a rise in oil prices.
Notes: Figures in parentheses refer to the amount of contribution made by each factor to changes in energy consumption.
Notes: Other effects include all factors that cause changes in consumption, excluding the temperature effect and economic growth effect. Examples are improvements in energy efficiency, changes in industrial structure, and changes in energy prices.
[FigureⅡ-4] Level of contribution to increase in primary energy consumption by each factor from January through September 2011
Category
Amount of contribution to a rise in consumption
(1,000 TOE)
Rate of contribution to a rise in consumption (%)
Level of contribution to rate of increase in primary
energy consumption
Growth effect 6,985 112.7 3.6%p
Temperature effect 1,296 20.9 0.7%p
Other effects -2,084 -33.6 -1.1%p
Total effects 6,197 100.0 3.2%
<TableⅡ-4> Level of contribution of each factor that led to a rise in primary energy consumption from January through September 2011
Trends in consumption of each energy source from January through October 2011 Petroleum product consumption showed little change and posted a year-on-year rise of 0.3%, influenced by sluggish consumption (-6.2%) in the second quarter.
- Consumption of fuel for transport was stagnant and consumption of heavy oil for industrial fuel decreased. In contrast, naphtha consumption for industrial raw material use went up 7.0% year-on-year as a result of increased production activities in the petrochemical industry. As of 2010, naphtha consumption for industrial raw material use accounted for 42% of total oil consumption.
- When excluding naphtha, petroleum product consumption went down 4.5% year-on-year.
Coal consumption witnessed a year-on-year rise of 3.8%.
- Coal consumption soared (10.1%) in 2010. However, the level of increase substantially slowed down afterwards as a result of a mere 0.1% rise in bituminous coal consumption for steelmaking from January through October 2011. Bituminous coal consumption for steelmaking accounted for 21.4% of total consumption in 2010.
- Coal consumption for power generation went up 8.9% in 2010, and also rose 3.6%
from January through October 2011. This is attributable to the continued use of power generation facilities at the highest level, notwithstanding zero facility expansion after the construction of Unit 8 of the Hadong Thermal Power Plant in 2009.
Natural gas (LNG) consumption rose 26.8% in 2010, followed by two-digit growth (10.2%) from January through October 2011.
- From January through October, LNG consumption for power generation recorded high growth of 11.8% year-on-year, attributable to an increase in electricity demand (5.5%) and shortage of base-load power generation facilities, despite the operation of Singori Nuclear Power Plant Unit 1.
- LNG consumption for production of town gas increased 9.3%, which meant a slight slowdown from the level of increase (12.4%) witnessed in 2010.
From January through October 2011, the level of nuclear power generation rose 2.9%
year-on-year as a result of operation of Singori Nuclear Power Plant Unit 113).
13) Korea’s 21st nuclear power plant. Began commercial operation on February 28, 2011.
From January through October 2011, final energy consumption rose by 3.1% year-on-year to stand at 163.2 million TOE, according to tentative figures.
[FigureⅡ-5] Trends in primary energy consumption increase rate
