Thread: China Hit by Wave of Power Rationing, Outages, And Factory Closures

China is facing ongoing power shortages in its industrial northeast triggering a wave of factory closures, with traffic lights, residential elevators, and mobile phone coverage also affected in some cities.


Power rationing is already in place in more than 10 provinces including the northeastern province of Jilin, amid soaring coal prices.


Jilin provincial governor Han Jun called for more channels to secure coal supplies from Russia, Mongolia, and Indonesia, while dispatching teams to secure supplies from China's northern region of Inner Mongolia.


According to an estimate by Goldman Sachs, as much as 44 percent of China's industrial activity has been hit by power shortages, leading analysts to cut their 2021 GDP growth forecast for China to 7.8 percent from an earlier estimate of 8.2 percent.


Some shops and hotels in the northeast were lit by candlelight, while homes went without power and malls shut early, amid growing concern that power shortages could also affect water supplies.


Video posted to the social media platform Weibo on Sept. 27 showed traffic queuing in darkness in one city, with captions that quoted Chinese leader Xi Jinping as calling for greater efforts to protect power supplies to ordinary people and keep the generators turning.


The worst-affected areas are mostly concentrated in smaller cities and rural areas, according to media reports.


"The reason for the power outage is that coal is more expensive this year, and in previous years it was imported into China from abroad," Jilin resident Wang Fengxia said. "So they can't afford it this year."


"They are rationing electricity, and accidents will occur in factories, mines, and hospitals," Wang said. "If they cut power just as people are having surgery in a hospital, they are just going to die."


Political considerations


A Shanxi-based current affairs commentator surnamed Jiang said political considerations inform every decision made by the ruling Chinese Communist Party (CCP).


"Actually, this has been their practice for many years now," Jiang said. "Political considerations trump everything in China these days."


"There is no sense that they are trying to avoid business closures or unemployment."


According to social media posts, water supplies were also cut off in some places, with others reporting that they hadn't eaten for two days, or were trapped in an elevator, or had to climb the stairs to get home to their high-rise apartments.


One family was sent to hospital after gas poisoning when their extractor fans stopped working during an outage, while another hospital was unable to treat patients due to a blackout.


Power suppliers said coal-fired power companies are "expanding their procurement channels at any cost" in order to guarantee winter heat and electricity supplies.


But China needs to increase production and its supply of coal, and more medium- and long-term contracts are needed to be signed to raise power plant inventories ahead of winter, the China Electricity Council warned.


Power-curtailment orders


The State Development and Reform Commission recently named Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Xinjiang, Yunnan, Shaanxi, and Jiangsu as regions that need to improve their energy management, while "power curtailment orders" have been issued across the northeast and in coastal regions, catching many factories off guard.


Factories making printed circuit boards in Suzhou and Kunshan in the eastern province of Jiangsu were suddenly notified of a total power outage for five days without prior warning, a Taiwanese business association told RFA.


"All manufacturers in Kunshan have been notified of power outages," Kunshan Taiwanese Chamber of Commerce president Tsung Hsu-hui told RFA. "We were notified about a week ago, and it will last until the end of the month."


"We will have to review the situation at the end of the month," Tsung said, adding that production capacity will be cut by at least 20 percent for the month.


Hsu Cheng-wen of the Suzhou Taiwanese Chamber of Commerce said the entire Suzhou Industrial Park, the Greater Suzhou Industrial Zone, Suzhou New District, and Kunshan have all been affected.


"The power rationing in Suzhou and Kunshan has had no impact on people's daily lives, and the retail industry isn't affected," Hsu told RFA. "The biggest impact should be felt by the highest-polluting industries, like cement and plastics manufacturers."


"Most manufacturers have already applied for late delivery, which may incur fines ... output will definitely decrease," he said.


According to Chinese financial scholar He Jiangbing, China currently gets 74 percent of its power from thermal generation, 11 percent from hydropower, and five percent from nuclear, wind, and other sources.


China Hit by Wave of Power Rationing, Outages, And Factory Closures — Radio Free Asia

World Food Costs at Risk of Soaring as China Faces Tough Harvest


(Bloomberg) -- China is set for a difficult harvest season as a severe energy crunch hurts the outlook for booming production, a development that risks triggering a renewed surge in world agriculture and food prices.

Autumn harvest in the top agricultural producer is underway just as the world’s No. 2 economy faces power shortages in industrial hubs that threaten to slow growth. Among the worst hit are northeastern provinces such as Jilin, Liaoning and Heilongjiang -- where about half of China’s corn and soybeans are grown.


The crisis is stoking concern that China will have a tough time handling crops from corn to soy to peanuts and cotton this year after some plants were asked to suspend or cut output to conserve electricity. Over the past year, the nation imported a record amount of agricultural products due to a domestic shortage, driving prices and global food costs to multiyear highs.


So far, the power shortage has forced soybean processors in northern regions to shut, affecting some operations of Louis Dreyfus Co., Bunge Ltd. and Wilmar International Ltd.’s Yihai Kerry unit. There’s also concern that the electricity crunch could cut operating rates of corn processors that make products like starch and syrup, Chinese brokerage Huatai Futures Co. said.


The country needs to ensure sufficient power supply to keep up with expectations for a bumper harvest. “This will affect the supply and prices of agricultural products, which is a matter of importance for the national economy and people’s livelihood,” according to Futures Daily, a state-backed media.


Some companies have bought back-up generators in case of prolonged power cuts, Futures Daily reported, citing traders and producers. Electricity is needed to dry the crops, an important process before storage and sale. Corn and peanut supplies may deteriorate in quality if they’re not processed in time.

World Food Costs at Risk of Soaring as China Faces Tough Harvest

Our incompetent govt in Australia have angered the chinks leading them to stop buying a lot of our commodities most notably coal. Apparently oz coal is metallurgical coal of high quality and most Chinese mills are set up to accept this. Chinese coal is just brown coal ( lignite) and doesn't perform well in there mills. Pretty sure they still need the oz coal but have lost a bit of face now.

Originally Posted by beerlaodrinker

Our incompetent govt in Australia have angered the chinks leading them to stop buying a lot of our commodities most notably coal. Apparently oz coal is metallurgical coal of high quality and most Chinese mills are set up to accept this. Chinese coal is just brown coal ( lignite) and doesn't perform well in there mills. Pretty sure they still need the oz coal but have lost a bit of face now.

So basically the whingeing chinkies have shot themselves in the foot then.

Pretty much. They have been successful at driving down the iron ore price though. Sneaky coonts.

Rock bottom: China's energy shortage prompts Beijing to release Australian coal trapped in storage

TAIPEI (Taiwan News) — As China’s energy crisis continues to unfold, Beijing is now releasing Australian coal from bonded storage in the hope of relieving its strained power system.


About 1 million tons of Australian coal have been locked up since Chinese leaders unofficially banned the import of the mineral last year amid increasing bilateral tensions, according to a Bloomberg report.


While some coal had been unloaded from ships, Chinese authorities did not let it pass through customs and instead kept it in storage. Chinese officials ordered power stations and steel mills to stop using Australian coal in October 2020, with the last cargo from Australia arriving in November, according to Customs data.


China’s General Administration of Customs did not answer calls for a comment on the matter on Wednesday (Oct. 6) as its citizens are still enjoying a roughly week-long public holiday that begins each year on Oct. 1, its national day.


According to reports, China seriously lacks adequate coal to keep powering the country, with inventories shrinking and prices soaring to record levels.


Meanwhile, some power plants have shut down for maintenance or are slowing to reduce losses from the added costs of running the facility.


Last week, China’s Vice Premier Han Zheng (韓正) instructed energy firms to shore up fuel supplies for winter. It's hoped that the news of releasing Australian coal will help address the blackouts and factory shutdowns that have impacted a majority of provinces in recent weeks.

Rock bottom: China's energy shortage prompts Beijing to release Australian coal trapped in storage | Taiwan News | 2021-10-07 14:44:00

Beijing is now releasing Australian coal from bonded storage in the hope of relieving its strained power system.

Oh dear. Imagine the humiliation after all their bluster.

Ahahahahha

We should put up the price

Cold keeps China coal prices high, power crunch stokes factory inflation



BEIJING, Oct 14 (Reuters) - China coal prices held near record highs on Thursday as cold weather swept into the country's north and power plants stocked up on the fuel to ease an energy crunch that is fuelling unprecedented factory gate inflation.


A widening power crisis in China - caused by shortages of coal, record high fuel prices and booming post-pandemic industrial demand as it shifts to greener fuels - has halted production at numerous factories including many supplying big global brands such as Apple Inc.


Soaring energy prices helped send producer price index (PPI) its highestin at least 25 years in September, rising 10.7% year-on-year, official Chinese data on Thursday showed.


Cold winter weather is likely to worsen the situation.


China's National Meteorological Center on Wednesday forecast strong winds could knock the average temperature by as much as 14 degrees Celsius in large parts of the country this week.

The three northeastern provinces of Jilin, Heliongjiang and Liaoning - among the worst hit by the power shortages last month - and several regions in northern China including Inner Mongolia and Gansu, have started winter heating, which is mainly fuelled by coal, to cope with the colder-than-normal weather.


Beijing has taken a slew of measures to contain coal prices rises including raising domestic coal output, rationing of power at factories and assuring energy supplies will be secured for winter heating season.


Earlier this week, China in its boldest step in a decades-long power sector reform said it would allowing coal-fired power plants to pass on the high costs of generation to commercial and industrial end-users via market-driven electricity prices.


Beijing had been trying to reduce its reliance on polluting coal power in favour of cleaner wind, solar and hydro.


"Making sure people are warm and keep businesses running - that's obvious, of course you need to that. Even as an environmentalist you don't want to get into a situation where you risk turning society against the climate transition," said Dimitri de Boer, chief China representative with the European environmental consultancy ClientEarth. "But that should be coupled with deploying renewables as fast as possible, to avoid similar situations in the future."


Local governments in top Chinese coal producing areas Shanxi and Inner Mongolia have ordered some 200 mines to boost output but flooding in top coal producer Shanxi has worsened the supply outlook, with analysts expecting electricity shortages and rationing to continue into early next year.


Banks are giving loans to coal mines to support production increase. Shanxi Coking Coal Group in China's top coal mining hub has received a 1 billion yuan ($155.30 million) bank loan for resuming operation from floods, according to a China's central-bank backed newspaper on Wednesday.


Daily coal output has reached the highest since February at more than 11.2 million tonnes, while average coal stocks at its power plants can support about 15 days of use, according to an official from the National Energy Administration a news briefing on Wednesday.


Official data on Wednesday showed China's coal imports last month rose to their highest this year.


More than half of the regions in Mainland China managed by State Grid have enforced power consumption cuts since last month.

The most-active January Zhengzhou thermal coal futures was up 3% at 1,608.8 yuan per tonne earlier on Thursday. The contract traded near record levels hit on Wednesday and have risen more than 200% year to date.

Cold keeps China coal prices high, power crunch stokes factory inflation | Taiwan News | 2021-10-14 1700