The impact of Electrical power restriction policy in China

The impact of Electrical power restriction policy in China

Recently, there is an electric power limited policy in lots of provinces all over the China, especially some industries that use a lot of energy, so the situation is grim! It is important to note that power is tight and power rationing will continue. Production capacity is limited, a variety of raw material prices continue to rise, such as steel. 

According to the statistics of electricity from January to July 2021, the industrial sector, which accounts for 71% of the country's electricity consumption. The iron and steel industry accounts for about 10% of the entire society, and the impact of power rationing on steel output is more serious. During the 2010 blackout, steel production fell and prices rose by more than 15%. Their prices rise by a large margin, the impact on the economy is too big. Over 20 provinces are rationing energy, and this has created uncertainty for businesses. 

Due to the resumption of some steel production time has not been determined, according to the current regional has announced the phenomenon of enterprise production estimates, the impact may be between 3million to 4million tons, do not rule out the scope of production limits continue to expand, the impact of production may continue to increase.

In such case, it affect all industries price become higher, production lead time will be much longer because of production capacity limitation.