Last week, coal futures in China closed at a record high after sixty coal mines in the country’s top coal-producing region were forced to shut amid heavy rain, flooding, and landslides, worsening the energy supply crisis.
Later in the week, colder than normal weather in parts of China sent coal prices surging to new highs, while electricity demand soared. The rising power demand with cooler weather and industrial recovery after the pandemic has led to shortages of coal in the country, which has been rationing power supply in at least 17 of the mainland regions since last month.
Year to date, the price of the most actively traded Chinese coal futures has soared by over 200%, according to Reuters estimates.
As temperatures further plunged over the weekend, coal futures hit a new record today.
The power cuts and the subdued property investment after the Evergrande debacle resulted in weaker-than-expected economic growth in China in the third quarter. Gross domestic product (GDP) rose by 4.9% in Q3 compared to the same quarter last year, below the 5.2-percent growth expected by analysts in a Reuters poll.
The slowdown in Chinese economic growth and the power cuts in factories risk roiling further global supply chains, which have already been strained by a mass chip shortage and delays in shipments of various input materials.
For example, Dutch conglomerate Phillips warned on Monday that its Q3 sales were “impacted unfavorably by intensified global supply chain issues, such as the shortage of electronic components.”
“Supply chain volatility has intensified globally, which already led to longer lead times to convert our strong order book to revenue in the third quarter, and we expect this headwind to continue in the fourth quarter,” CEO Frans van Houten said.
This article was originally published on Oilprice.com
© 2021, paradox. All rights reserved.
The man who critically injured Slovak Prime Minister Robert Fico on Wednesday was a fierce…
The Asia-Pacific region should be free of military blocs because of their potential to undermine…
Russian President Vladimir Putin was welcomed with an honor guard after his plane touched down…
Russian President Vladimir Putin has set the stage for his state visit to China by…
С каждым днем онлайн-казино становятся все более популярными среди азартных игроков. И это вполне логично:…
Russian President Vladimir Putin has officially appointed Andrey Belousov as the new minister of defense.Belousov,…