General

More underground power consumption and dual control policy documents, various industries with high energy consumption and high pollution have suspended production and work, and news of production restrictions and upgrades in Jiangsu, Yunnan, Zhejiang and other places has blown up the circle of friends. Before the Mid-Autumn Festival, a group of listed companies announced power cuts and halted production. On the evening of September 22, another group of listed companies disclosed the impact of production restrictions.

There is no complete news about how many provinces and how many industries are affected by the unprecedented "dual energy consumption control" stringent measures. According to the information disclosed by the National Development and Reform Commission on August 18 this year, in addition to Yunnan and Jiangsu provinces, Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Xinjiang, and Shaanxi can be classified as first-level warnings.

Affected by the epidemic in Southeast Asia, orders from various countries have flooded into China, resulting in a surge of 20.6% in factory power consumption. However, the cost of power generation in China is high, and the prices of the products produced have not risen much. If the epidemic in Southeast Asia eases, overcapacity may eventually be caused, and small and medium manufacturing companies are likely to close down in batches.

In order to force the "high investment, high energy consumption, and high emission" enterprises to complete industrial upgrading, step out of the comfort zone and avoid falling into the crisis, the Chinese government has promulgated a dual-control environmental protection policy.

Tight power supply, dual-control energy consumption upgrades, etc. are the main reasons for this power curtailment and shutdown. Details are as follows:

▎Guangdong

Guangdong Power Grid Dongguan Power Supply Bureau Houjie Power Supply Branch issued a notice that due to the current shortage of power supply in our province, in order to ensure the orderly supply of power. According to the requirements of the Municipal Development and Reform Bureau's "Notice on Implementing Staggered Power Consumption for Enterprises with High Energy Consumption", from September 22 to 26, 2021, the power consumption of industrial production loads will be stopped at all times every day. It is understood that ordinary enterprises will have power outages for four days this week, and energy-intensive enterprises will have outages for a week.

▎Anhui

Recently, the Office of the Leading Group for Energy Guarantee Work in Anhui Province issued the "Emergency Notice on Doing a Good Job in Orderly Utilization of Electricity." Among them, it is mentioned that due to factors such as the continuous shortage of electric coal and the abnormal frequency of units in the province, there will be a gap in electricity supply and demand in the province. On September 22, the province’s maximum electricity load is estimated to be 36 million kilowatts, and the balance of power supply and demand is about 2.5 million. Tens of thousands of gaps, the supply and demand situation is very tight. In order to ensure the smooth operation of the province's power grids and reliable power supply, after research, it was decided to start the province's orderly power utilization plan on September 22.

▎Zhejiang

Towards the end of the third quarter, many places have strictly controlled energy consumption, increased power and production restrictions, and tightened the dual control policy. The eastern province of Zhejiang is facing an upgrade of energy consumption dual control. On the evening of September 21, it was reported that Keqiao District, Shaoxing City issued a notice of power rationing. From now to October 1, Zhejiang Province will shut down all high-energy-consuming enterprises, including all printing and dyeing plants, chemical plants (such as battery manufacturers). ), chemical fiber factory, etc.

▎Jiangsu

Since the beginning of this year, the energy-saving situation in Jiangsu Province has been quite severe, and energy consumption has risen instead of falling. The main reason is that key energy-consuming companies use energy in disorder and in violation of regulations. It has been less than 4 months since the end of the year. If you want to reverse the situation, you must adopt unconventional measures, administer drastic drugs, and act quickly to complete the target task at the end of the year.

Electricity rationing is implemented in some parts of Jiangsu, the time is tentatively scheduled for 15 days, and it will be implemented at 0:00 on September 15. The city has uniformly arranged the power supply department to do its best to provide power outage services. The notice requires power supply: the industry pulls it off, the household power is retained, the maintenance power is used, and the security load. After half a month of unified maintenance, the office air-conditioning was disabled, and the street light control was halved.

The textile, steel, cement and other high energy-consuming enterprises in Jiangsu Province are also affected by the "dual control" of energy consumption. Currently, there are 37 cement clinker kilns in Jiangsu, 14 of which have been discontinued.

▎Shaanxi

On September 13, the Development and Reform Commission of Yulin City, Shaanxi Province issued a notice on ensuring the completion of the 2021 energy consumption dual control target task, requiring newly built "two highs" projects not to be put into production, and new "two highs" projects that have been put into production this year. The production base is capped at 60%. Other "two highs" enterprises have implemented measures such as reducing the operating load of their production lines and shutting down submerged arc furnaces to limit production to ensure a 50% production limit in September. According to statistics, Yulin, Shaanxi has an electrolytic aluminum production capacity of 600,000 tons. If calculated by a 50% reduction, the operating capacity has dropped by 300,000 tons. Regulation period: September 2021-December 2021.

▎Yunnan

On September 11, the Yunnan Provincial Development and Reform Commission issued the "Notice on Resolutely Doing a Good Job in Dual Control of Energy Consumption", requesting to strengthen production control in key industries, including ensuring that the monthly average output of green aluminum companies from September to December is not higher than the output of August. If implemented in accordance with the current policy, according to the output of 236,000 tons of electrolytic aluminum in Yunnan Province in August, the production capacity of electrolytic aluminum in Yunnan Province will remain at 2.78 million tons, and the total annual output will be 3.22 million tons.

▎Guizhou

On September 10, the Guizhou Provincial Energy Bureau issued the "Orderly Electricity Utilization Plan in Guizhou Province in 2021". In order to ensure the operation of the local power grid and the healthy development of the economy and society, it is divided into four levels: red, orange, yellow, and blue according to the scale of the electricity gap in the province. Early warning. When warnings of different levels appear, the corresponding level of response is initiated. When there is a gap in the electricity supply in the province and the orderly use of electricity needs to be initiated, it shall be reported to the provincial people’s government for approval before implementation. Grid enterprises shall arrange the wrong and peak avoidance production of relevant enterprises according to the early warning response level and orderly power consumption response enterprise ranking list, and combined with the actual situation. The five electrolytic aluminum plants in Guizhou are among them, with a total built-up capacity of 1.36 million tons and a total operating capacity of 1.3 million tons, accounting for 3.36% of the national operating capacity. The plan issued by Guizhou Province is different from other provinces in that it is not a restriction on power consumption and production due to dual control of energy consumption, but an early warning measure based on possible tensions in power resources.

These areas have more impact

The so-called "dual control of energy consumption" policy refers to the related policy of dual control of energy consumption intensity and total amount. According to many industry insiders, since this year, the assessment of "dual energy consumption control" has been relatively strict, and the assessment results will be used as the basis for the evaluation of the work of the local leadership team. In the first quarter and half of this year, the National Development and Reform Commission also issued the target warning levels for energy consumption intensity reduction progress and the target warning levels for total energy consumption control. The governments of various regions that are listed as red can only increase the control of high-energy-consuming enterprises in their regions. It will be more powerful.

The "Barometer of Completion of Energy Consumption Dual Control Targets in Various Regions in the First Half of 2021" issued by the National Development and Reform Commission shows that in terms of energy consumption intensity reduction, Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Xinjiang, Yunnan, Shaanxi, and Jiangsu 9 In the first half of the year, the energy consumption intensity of these provinces (regions) rose instead of falling, and was classified as a red first-level warning; in terms of total energy consumption control, eight provinces including Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Yunnan, Jiangsu, and Hubei (District) is classified as a red first-level warning.

Due to environmental protection inspections, dual-control restrictions on production suspension, power rationing, and hazardous chemical investigations, all measures have triggered market concerns on the supply side. Raw materials have been looted and out of supply has already occurred.

For manufacturing companies, power curtailment will lead to a decline in the operating rate. If long-term power curtailment produces, it will affect not only delayed delivery, but also changes in market raw material supply and market conditions.

In any case, channel distributors should make preparations as early as possible, pay close attention to clearing inventory and stocking, so that they have grain in their hands and don't panic in their hearts!