Widening power shortages in China have halted production at numerous factories including many supplying Apple and Tesla, while some shops in the northeast operated by candlelight and malls shut early as the economic toll of the squeeze mounted.
China is in the grip of a power crunch as a shortage of coal supplies, toughening emissions standards and strong demand from manufacturers and industry have pushed coal prices to record highs and triggered widespread curbs on usage.
The impact on homes and non-industrial users comes as night-time temperatures slip to near-freezing in China’s northernmost cities. The National Energy Administration (NEA) has told coal and natural gas firms to ensure sufficient energy supplies to keep homes warm during winter.
Tight coal supplies, due in part to a pickup in industrial activity as the economy recovered from the pandemic, and toughening emission standards have driven the power shortages across China. The power pinch has been affecting manufacturers in key industrial hubs on the eastern and southern coasts for weeks. Several key suppliers of Apple and Tesla halted production at some plants.
At least 15 Chinese companies have said in exchange filings that production had been disrupted by power curbs, while more than 30 Taiwan-listed firms with China operations had stopped work to comply with the power limits. The steel, aluminum and cement industries have also been hard hit by the output curbs, with about 7% of aluminum production capacity suspended and 29% of national cement production affected, Morgan Stanley analysts wrote.
The fallout of the power shortage has prompted some analysts to downgrade their 2021 growth outlook. Morgan Stanley analysts said production cuts, if prolonged, could knock 1 percentage point off China’s GDP growth in the fourth quarter.
Source – https://finance.yahoo.com/news/china-power-crunch-spreads-shutting-060437092.html
