[ad_1]
Whether it’s LNG, dry bulk, containers, car carriers, tankers or shipbuilders, China’s current extreme power shortages affect almost every aspect of shipping.
Two-thirds of Chinese provinces have been forced to implement electricity rationing measures in the past fortnight as the country faces a severe coal shortage. Plant closures are expected to have a significant impact on container export volumes over the coming months.
Official data released this week showed Chinese factory activity contracted in September for the first time since February 2020, when China first faced the spread of Covid-19.
Since last week, more than 100 companies, from electronics manufacturers to gold diggers, have notified stock markets of production suspensions.
This is the world’s worst energy crisis in a decade
One of the worst-hit provinces is Jiangsu, where the major cities of Kunshan and Suzhou are home to key clusters in electronics, chipmaking and textiles.
The China Coal Industry Association warned this week that it was “not optimistic” about supplies before winter, the peak season for demand.
The government said its priority would be to secure electricity and heating supplies to households during the winter, as state-owned energy company Sinopec has pledged to increase imports of liquefied natural gas.
However, analysts at Citi said in a note that they expected electricity shortages to persist during the peak winter season for heating, mainly coal.
Sources from China’s shipbuilding industry said Splash this week that power cuts may hamper delivery times in the coming months.
Commodore Research said in a recent memo that China’s dependence on thermal coal has continued to grow. So far this year, power generation from thermal coal has contributed 72.1 percent of China’s total power generation. During the same period last year, it contributed 71.3% of total electricity production.
The extreme demand for coal, combined with high imports of iron ore, pushed dry bulk rates – especially for capesizes – to the territory they enjoyed in their heyday of 2007 and 2008, aided by the great port congestion.
According to Braemar ACM, Cape Town’s queues in China are now 117% higher than the five-year average.
China banned Australian coal last year, which dramatically increased the tonne-mile scenario for dry bulk, as the world’s most populous nation scoured coal from all corners of the planet to replace it. its Australian source. There is now speculation that, as panic sets in in Beijing, the Chinese government may have to do an about-face on its Australian ban.
Other Australian products have recently seen a resurgence in the People’s Republic. China grabs shipments of Australian wheat despite a trade standoff between the two countries, as crop downgrades elsewhere lead to a global production deficit. The buying frenzy comes as Australia, a key global food supplier, expects a second consecutive record harvest, as producers in the northern hemisphere have been hit by adverse weather and drought .
It is not just China that is experiencing an energy crisis. In the United States, Hurricane Ida hit oil and gas production on the Gulf Coast, while in Europe, natural gas shortages caused costs to skyrocket.
Lorentzen & Stemoco analysts have identified five factors at work, causing what the Norwegian broker now describes as the world’s worst energy crisis in a decade.
“First, demand is rebounding solidly after Covid-19, as industry and consumer demands return to pre-pandemic levels,” analysts from Lorentzen & Stemoco noted in an update to customers today. hui. “Second, investments in the energy sector have been underfunded for years, both by businesses and governments. Third, the shift to more renewable types of energy such as wind and solar left a void that worsened the deficit. Fourth, climate change causes destruction of supply and extreme shifts in demand. And finally, political relations have been altered between the haves and have-nots. “
[ad_2]
Source link