FOCUS: China’s power cut policy threatens the battery materials supply chain

China's power-cut policy has caused disruption in the battery raw materials supply chain and has brought uncertainty to the price of materials like nickel and cobalt, sources told Fastmarkets.

The country started introducing power-consumption limits in some provinces in July 2021 due to power shortages following its carbon-reduction policy, and the curbs have been extended into more provinces and have affected more industries.
At first, the policy only affected traditional industries, which consumed large amounts of electricity - like aluminium and ferrous materials - but further restrictions ahead of China's national holidays have now affected the battery raw materials industry, sources told Fastmarkets.
“In the middle of September, some battery raw materials producers had already sensed the power cuts “storm” and they told traders that they only accept materials like nickel briquettes, which can be delivered before October, otherwise they refuse to take them,” a Shanghai-based trader said.

“It is also interesting that some people who previously said that the battery raw materials industry cannot be affected because it is less energy intensive now stopped saying that, and we did see...


Carrie Shi

Yingchi Yang

September 29, 2021

18:15 GMT