SHANGHIA, Jun. 3 (SMM) -- According to SMM sources, the State Grid Corporation of China released a notice on an emergency electricity price adjustment to Huihua region in Hunan province. According to the notice, the latest state grid electricity prices in Yuangling, Chenxi and Xupu counties of Huaihua city were lifted to RMB 0.612/kWh. Taking other extra RMB 0.03/kWh electricity prices into account, total electricity prices were around RMB 0.642/kWh. The prices adjustment officially came into effect from June 1st.
According to SMM sources, the previous state grid electricity prices in Huaihua region were around RMB 0.456/kWh, and the latest price climbed by 34.21%. Affected by the electricity price adjustment, some silicon metal producers had already halted production. Currently, local producers had already ceased to quote offers with wait-and-see attitude, although they had spot inventories of silicon metal.
SMM believes that the significant price increases in Huaihua region of Hunan province indicated strong determination and forceful execution by Chinese Government to regulate over capacity companies with high energy consumption and high environmental pollution. Electricity price hike will also gradually spread throughout the country. In this context, the number of producers that halt production in 2H 2010 will increase due to high electricity price pressure at silicon metal producers.
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