An official with China's National Development and Reform Commission (NDRC) said yesterday the country's "relative overcapacity" in energy was likely to persist.

Wang Siqiang, deputy head of the energy bureau of NDRC, said even though energy costs less compared to last year, companies, which are China's major power consumers, are using less of it.

Power consumption was down by 3.7 percent in October. It was the first year-on-year monthly decrease since 1999.

Analysts with Shanghai-based Guotai Jun'an Securities said the decline showed many companies in the manufacturing sector had cut production due to a continuous price slump of industrial commodities both at home and abroad.

"Energy supply is relatively sufficient except for a shortage in natural gas," said Zhou Dadi, a researcher with the Energy Research Institute of NDRC.

Zhou pointed out, electricity producers faced major problems as the monthly growth in power consumption had been less than 10 percent during the past four months.

He said power generation dropped 4.65 percent in Oct. and estimated it might have tumbled more than 7 percent in Nov., the biggest drop in history. Official figures will be released later this month.

Meanwhile, the growth in oil demand eased by 3 percentage points in October compared with average growth in the first three quarters.

Wang said the overcapacity would last for a while because expansion plans of energy suppliers including coal and power producers would increase supply, while it would take time for pent-up demand to restore upward momentum.