China's coal and power output is expected to continue moderate growth in months to come due to restrict on small mines and GDP worries.

    According to the newly released data of National Development andReform Commission (NDRC), China's coal output in  July rose on-year 10.9 percent to 220 million tons, with growth rate down 6.4 percentage points from June.

    China's power output in January-July amounted to 2,006.3 billion kwh, with on-year growth rate down 4.6 percentage points to 11.9 percent.

    The on-month drop of coal output in July was attributed to closing down of some small mines during Olympics and the interim price capping on power coal since June to exert negative impact on coal production in July, according to an analyst.

    After Olympics, the coal output is likely to climb as some of small coal mines resume production and government' support policies are expected to come out for coal production, said an official with China National Coal Association.

    But China's tight coal supply will not be reversed so long as the country keeps on close attention to safety production of small coalmines and natural resource integration, predicted Chen Liang, a senior analyst of Pin An Securities.

    Wang Shuai, the top analyst with Orient Securities, also holds that coal output is unlikely to increase by a large margin in short term after Olympics.

    "The situation of power industry makes the expert not optimistic about the economic prospect," added Wang.

    According to the statistics of China Electricity Council, the growth rate of power output in July went down 0.2 percentage points from June, down 3.7 percentage points from May.

    The growth rate of thermal power output in July dropped 0.7 percentage points from June.

    "As GDP is linked with power output, the declining growth rate of power output foretells the sliding trend of macro economy", said an expert.

    Chen Liang holds different view that economic depression doesn't mean the shrinking demand for power.

    China will still face short coal supply upon the worst expectation of GDP growth rate of 6 percent in 2009, said Chen.

    "Small mines are the key variable for coal supply", added Chen.