Home » Another round of power cuts and shutdowns in more than 10 provinces in mainland China has huge losses | Double pressure | Impact | Incalculable

Another round of power cuts and shutdowns in more than 10 provinces in mainland China has huge losses | Double pressure | Impact | Incalculable

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[Epoch Times September 24, 2021](Epoch Times reporter Fang Xiao reported) A new round of power outages and production shutdowns is sweeping at least 10 provinces in the mainland, and many A-share listed companies have intensively announced production shutdowns. The specific call time is uncertain. People in the power system said that the power supply gap has widened, and the impact may far exceed the previous round of power rationing.

Power supply companies are forced to suspend production

At least 10 provinces including Guangdong, Anhui, Jiangsu, Zhejiang, Shandong, Guangxi, and Yunnan have implemented measures to curtail power, suspend production or reduce production.

From the evening of September 22, a number of A-share listed companies have issued announcements stating that the production lines of the listed companies themselves or their subsidiaries have been temporarily suspended due to the shortage of power supply.

The West Gate announced that due to the tight power supply, Zhejiang Province has recently implemented power reduction for key energy-using enterprises within its jurisdiction and suspended production of key energy-using enterprises. Production is expected to be suspended until September 30. The company is currently forced to temporarily suspend production, which is expected to affect the output of shading fabrics about 115,400 square meters per day.

Nanjing Chemical Fiber announced that due to the tight power supply in Jiangsu Province, the wholly-owned subsidiary Jiangsu Jinling Cellulose Fiber Co., Ltd. temporarily suspended production on September 22 and is expected to resume production in early October. Driven by the sharp increase in the price of chemical raw materials, the production cost of Jiangsu Jinling’s viscose staple fiber products has increased significantly, and the sales margin has been negative. The company judges that Jiangsu Jinling’s temporary suspension of production due to the impact of power supply will not have a material adverse effect on the company’s operating results.

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“21st Century Business Herald” reported on September 24 that behind the power curtailment and production suspension, there are two main factors superimposed. One is the tight coal supply and the high electricity price caused by the shortage of electricity supply, and the other is the energy consumption in some areas. Double control pressure and adopt energy consumption control measures.

The so-called “dual control of energy consumption” policy refers to the related policy of dual control of energy consumption intensity and total amount.

On September 23, the person in charge of a packaging material factory in a certain eastern province sent a message to employees that he had just received a notice from the Power Supply Bureau that the factory would shut down at 10 o’clock and the specific call time was yet to be determined.

The day before, the factory had received an verbal notice of “four stops and three stops”. From Friday to Sunday, the factory did not request a full stop, but there are still three time periods each day that need to be coordinated with the power outage.

According to a person in charge of the factory, power outages will lead to increased production costs. What’s more serious is that productivity will be greatly reduced, and the delivery cycle will be prolonged. With the approach of Double Eleven, the packaging demand for fast-moving consumer goods has skyrocketed, and customers are urging delivery. Now it is more cautious to accept new orders. It is necessary to explain to customers in advance that the delivery period will be extended by at least 1 week to 2 weeks. The impact is difficult to estimate, and it is not clear how long the power cut will last.

According to the report, a person in the power system said that there have indeed been situations where some power plants are losing money as they generate electricity. Power plants are unwilling to sell electricity at a loss, which has widened the electricity supply gap.

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At present, the electricity gap in some provinces continues to expand, and the impact may far exceed the round of electricity rationing a few months ago.

In December last year, there was a round of power rationing in many provinces of the mainland.

Large manufacturing provinces also curtail power at the same time

The general manufacturing industry in Dongguan, Guangdong will have a power outage for four days starting on September 22, and high-energy-consuming enterprises will have to outage for a week. The rest of the provinces all have power outages for one to two days a week according to high-level instructions, and some companies simply take leave in advance and resume production after the 11th long holiday.

According to a report by China Business News, the owner of the manufacturer in Houjie Town, the hometown of furniture in Dongguan, received a mobile phone message from the Houjie Power Supply Branch of the Dongguan Power Supply Bureau on the 22nd: Due to the current shortage of power supply in our province, the implementation of wrong Notice of peak electricity consumption.

Houjie, Dongguan, requires a four-day power outage for the general manufacturing industry and one week for high-energy-consuming enterprises. Industrial users in Jieyang use electricity one day a week and stop work for six days; Foshan and Shantou implement “on two and stop five” a week.

The report quoted people familiar with the Guangdong Power Grid as saying that the reason for the shortage of power supply in Guangdong is the shortage of power supply. “The thermal power plant has not been operating at full capacity so far. One of the units has been out of service, and the other has only half of the usual power supply.” The reason lies in the current coal price and supply. “The electricity price per kilowatt-hour of thermal power generation is more than RMB 40 cents, but the cost of power generation has reached nearly RMB 60 cents. This means that for every kilowatt-hour of electricity, you will lose more than RMB 40 cents.”

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In addition to Guangdong, many major manufacturing provinces on the mainland have also announced power rationing.

Shaoxing City, Zhejiang Province issued an emergency notice requiring all enterprises to suspend business for three days from the 19th to the 21st, and printing and dyeing enterprises were required to suspend business from the 19th to the end of the month. Among them, foreign trade companies have suffered the most.

The CEO of a company in Keqiao District, Shaoxing City, Zhejiang Province, told the Epoch Times reporter on the 23rd that the power rationing order came very suddenly and will continue until the end of the month. He also said that the sudden power failure caused the company to suffer huge losses and may face customer claims.

The current power rationing in multiple provinces has triggered heated discussions among netizens. Weibo netizens “Shengshi’s Warning” said that the electricity curtailment in Dawang area of ​​Shandong is severe, and it is not known when it will return to normal. The tire factory’s output has dropped by 20%-30% recently. The demand side’s tradition of stocking goods for the eleventh month is estimated to be gone this year. One coal has caused a nationwide industrial power cut. I don’t know if it will affect employment.​​​

Another netizen complained that the nationwide rationing of electricity to reduce emissions has caused me suffering at work. There is no air-conditioning at 35 degrees, and I don’t know how long it will take.

Editor in charge: Lin Congwen#

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