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China electricity crisis hits factories as coal lobby warns ‘not optimistic’ about supply


SHENYANG, China, September 30 (Reuters) – Small businesses caught in China’s protracted electricity and coal crisis are turning to diesel generators, or simply shutting down, as coal officials have expressed fears for stocks before winter and manufacturing contracts globally. 2 economy.

Beijing is working to send enough coal to electric utilities to restore supply, with the worst blackouts in years affecting large swathes of the country, especially three northeastern provinces, including Liaoning , which is home to nearly 100 million people.

The shortages, now well into their second week, were sparked by a prolonged rise in the price of coal, not China’s. 1 source of fuel to generate electricity, which is now hovering near record levels amid tight supply, stricter emissions standards and strong manufacturing demand so far.

Business owners in Liaoning’s capital Shenyang told Reuters on Thursday they were losing money as official data separately showed the country’s official manufacturing measure contracted in September – for the first time since February 2020. read more

The pressure on business comes as the China Coal Industry Association warned in a statement that coal stocks at power plants are low and it is “not optimistic” before the peak winter demand season.

The association said it had called on companies to “spare no effort” to increase supply and adjust the sales strategy to non-key, energy-intensive or long-term users. term.

Employers at an industrial laundromat in Shenyang that Reuters visited on Thursday had switched to diesel generators due to the power shortage and were losing money.

At a steel parts factory that has been closed in recent days, staff said they chose not to rent a generator, but could do so if the crisis persists.

Beyond cities and factories, Chinese farmers are also facing heavy losses, analysts and industry participants said after blackouts hit production of key ingredients for raw materials. animal. Read more

This week, authorities have repeatedly sought to assure residents that there will be electricity for home use and for heating as winter approaches. Read more

But Citi analysts said in a note that they expected power shortages in China to persist into the winter, when demand for heat – mostly using coal-fired electricity – peaks. .

China’s state planner, the National Development and Reform Commission (NDRC), said on Wednesday the government would not stop electricity prices from floating within a reasonable range and let them reflect market fundamentals. and cost changes. Read more

In the key industrial center of southern Guangdong Province, a statement released in late August by the Guangdong Provincial Development and Reform Commission said the plan was to increase electricity tariffs by 25 percent during the peak load period for non-residential users.

Reporting by Gabriel Crossley in Shenyang and Shivani Singh in Beijing; Additional reporting by Min Zhang in Beijing, Brenda Goh in Shanghai and Aizhu Chen in Singapore; Editing by Kenneth Maxwell

Our standards: Thomson Reuters Trust Principles.


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