![]() Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account Authorities in Inner Mongolia - China’s second largest coal-producing province - on Friday also asked 72 mines to boost production by 98.4 million metric tons, the equivalent of about 30% of China’s monthly coal production. ![]() The government is taking other steps to ease the crunch. And since Beijing controls the cost of power, producers couldn’t simply raise their prices without the go-ahead from the government. Power plants in China had been unwilling to boost production because of the high cost of coal. “Those factors have led to power cuts in some places, affecting normal economic operations and residents’ lives.” “Since the beginning of this year, energy prices in the international market have risen sharply, and domestic supply of power and coal have remained tight,” the State Council, the country’s cabinet, said in statement. The problems led China’s central government on Friday to allow coal-fired electricity plants to increase the price they charge for power by as much as 20%. ![]() Qilai Shen/Bloomberg/Getty ImagesĬhina orders coal mines to increase production as power shortages bite They added that the “risks to GDP forecasts could be larger as disruptions to production and supply chains feed through.”īarges travel past a power plant in Wangting, Jiangsu province, China, on Sept. “China’s electricity cuts will add to economic stresses, weighing on GDP growth for 2022,” Moody’s analysts said in a Monday report. But renewable energy sources, such as hydropower, have been hobbled by drought in recent months. The agency added that overall power consumption from January to August grew 14% compared to the same time last year. Restrictions on coal from key supplier Australia and weather woes have exacerbated the issue.Ī hotter-than-usual summer pushed people to use a record amount of power in July, according to China’s National Energy Administration. China’s post-pandemic construction boom has been heavily reliant on fossil fuels, while a national push to reduce carbon emissions led hundreds of coal mines to shut down or slash production earlier this year - driving coal prices higher. The power shortage is a result of a range of factors that have boosted demand and reduced supply. That’s hurt industrial output and is weighing on China’s economic outlook. Last year, it made up nearly 60% of China’s total energy use.Īnd the extreme weather hit just as China was attempting to ease power shortages by ramping up coal production and allowing coal-fired power stations to charge more for their electricity.Įnergy shortages have spread to 20 Chinese provinces in recent weeks, forcing the government to ration electricity during peak hours and some factories to suspend production. The price has more than doubled so far this year.Ĭoal is the main source of energy in China and is widely used for heating, power generation, and steelmaking. The price of thermal coal futures, which is primarily used to generate power, surged to all-time highs Monday on the Zhengzhou Commodity Exchange - up as much as 12% to 1,408 yuan ($219) per metric ton. ![]() The adjacent Shaanxi province, which ranks third in the country for coal output, also reported heavy rains and mudslides that hurt operations at local mines, according to the the state-owned Securities Times, a national financial newspaper. (Chinatopix via AP) Chinatopix/APĬhina's growing power crunch threatens more global supply chain chaos Global shoppers face possible shortages of smartphones and other goods ahead of Christmas after power cuts to meet government energy use targets forced Chinese factories to shut down and left some households in the dark. Steam billows out of the cooling towers at a coal-fired power station in Nanjing in east China's Jiangsu province on Monday, Sept.
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