FOCUS: Persistent power cuts in China create uncertainty for base-metal material demand

China’s electricity system is particularly stretched this summer, so aluminium, zinc and lead smelters have received repeated notices for several weeks that they should restrict power use, and many are not still seeing an end to the situation, Fastmarkets has learnt.

“Power consumption limits will be a recurring issue for Chinese smelters, [and] not only for summer. [They are] likely to be extended throughout the year,” a source with a major Chinese zinc smelter in Guangxi said, after receiving a notice from the provincial energy supplier to carry out peak-load shifting measures from mid-July onward.
This notice, seen by Fastmarkets, cited an estimated daily shortage of 80,000MWh of power for Guangxi prefecture, due to a drop in hydropower supply resulting from droughts, and a disruption in coal supply, as well as surging energy demand.
It was the second time this year that the zinc smelter had received an order limiting power consumption.
This time, the latest orders were sent to a wider area of China, to base metal smelters across the provinces of Guangxi, Yunnan, Hunan, Guizhou, Henan and Inner Mongolia.

This means that power...

Published

Julian Luk

Yiwen Ju

July 21, 2021

19:00 GMT

London