SHANGHAI, Dec 17 (SMM) — Zhejiang Yiwu and Jinhua and Hunan Changsha have issued notices on reducing electricity consumption due to shortages in power supply. All processing plants are required to stop production from now to December 31, and government agencies are also required not to turn on air conditionings when the temperature is above 3 ℃. Zhejiang's initiative on orderly use of electricity not only takes into account the shortage of power supply, but also considers requirements of green development.
Previously, according to the requirements of the Implementation Plan for Further Strengthening Energy Consumption to Promote High-quality Development in Zhejiang Province (2018-2020), by 2020, Zhejiang will release more than 6 million mt of standard coal, and complete the target of controlling energy and coal consumption in the 13th five year plan, with the energy consumption per unit GDP to decrease by more than 3.7%, total energy consumption to increase by less than 2.3%, and total coal consumption to fall by more than 5% to below 131 million mt compared with 2015.
In addition, Hunan, Inner Mongolia, Jiangxi and other regions have also issued notices, taking measures to deal with power supply shortages. So what is the specific effect on nonferrous metals producers?
Steel: As of December 15, operating rates at 34 Chinese independent electric arc furnace (EAF) mills averaged 78.64%, losing 4.69 percentage points on the week. Operating rates gained one percentage point from the previous week to about 95% in south China, while plunged 10 percentage points to about 82% in east China as steel mills in Zhejiang suspended or reduced production this week amid local electricity restrictions. Further tightened supply is likely to continue to support rebar prices in the near term.
Lead: The government of Zhejiang has classified local enterprises into four grades (A, B, C and D) according to their tax contribution and employee insurance rate. Grade A lead-acid battery makers do not have to reduce power consumption.
Stainless steel: The two stainless steel mills in Zhejiang told SMM that their production has not been affected.
Copper: All industries in Jiangxi have received notices of reducing electricity consumption, but the warmer weather in the past two days has eased power supply pressure. The notice from the National Development and Reform Commission only informed enterprises of the possibility of power cut. Enterprises in Jiangxi are required to appropriately reduce production at night when residents are cooking or during peak power consumption period. There is no hard and fast rule on specific blackout arrangements. It is expected that if the weather is not very cold, few enterprises will stop production. Most of the copper processors in Zhejiang have not been affected, while grade B processors in Jinhua are expected to take the mode of “three days on duty and one day off” till the New Year's Day.
Tin: Tin plants in Jiangxi are informed of the possibility of power cuts, but their production has barely been affected. Plants in Zhejiang are classified into four grades. Enterprises with different grades should comply with different electricity restriction requirements. Plants in Hunan are required to restrict electricity use till the Chinese New Year.
Zinc: Grade A enterprises do not have to reduce power consumption, grade B plants should take the mode of “three days on duty and one day off”, grade C plants “two days on duty and two days off”, while grade D enterprises are not allowed to produce. Households are encouraged to save electric power, shopping malls are not allowed to turn on air conditionings if the temperature is not low, advertising lights and some street lights are not allowed to be turned on. And this is expected to extend to January 2021.
Aluminium: Aluminum processing enterprises are not large consumers of electricity. At present, only a small number of aluminium extrusion producers in Huzhou and some secondary aluminum and wheel enterprises in Jinhua are required to limit total power consumption.
