Extended China power cuts hit Q3 base metals, ferro-alloys supplies, pushing up prices

Power cuts remained a prominent factor in China through the third quarter of 2021 as the world’s second-largest economy grappled with soaring coal prices and its own strict limits on energy consumption - put in place to help the country achieve carbon neutrality by 2060.

An increasing number of factories - especially those in energy intensive industries - have suffered from curbs to their power usage, which were then exacerbated by supply chain disruption across a wide range of metal and ferro-alloy products, with price rallies were extended from the second quarter.

Growing power crunch
Since late August, as many as 20 provinces in China have been experiencing power cuts to some degree, according to estimates from local digital media outlet Jiemian.

Coal shortages arising from China’s tightened coal mining restrictions and reduced Australian coal imports have been blamed for falling supplies of thermal power, which accounted for 71.2% of China’s total power in 2020, according to the country's National Bureau of Statistics.

The soaring coal prices led to a reduction in power generation because the energy companies were unable to pass on such high costs to consumers because power rates in China...

Published

Ruby Liu

Siyi Liu

Yingchi Yang

Yiwen Ju

Jessica Long

October 12, 2021

20:28 GMT

Shanghai