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The impact of power curtailment of China Southern Power Grid on southern copper industry chain
May 20, 2021 11:35CST
Source:SMM
It is reported that plants in Yunnan and Guangdong have been required to stagger power consumptionrecently due to tight electricity supply. Yunnan and Guangdong are two main production areas of copper cathode, and how will this move affect southern copper industry chain?

SHANGHAI, May 20 (SMM)—It is reported that plants in Yunnan and Guangdong have been required to stagger power consumptionrecently due to tight electricity supply. Yunnan and Guangdong are two main production areas of copper cathode, and how will this move affect southern copper industry chain?

Why has there been a power shortage recently? Experts from China Southern Power Grid explained that in addition to rising demand for electricity (aluminium capacity surged in Yunnan and Guangxi and power consumption by Guangdong’s manufacturing sector rose sharply), the lack of power generation capacity and power supply capacity is the direct cause of power shortage.  

Total production capacity of copper cathode in Yunnan stood at 625,000 mt in 2020. Local smelters told SMM that they have not been required to restrict power consumption yet, and even so, they also have waste heat power generation equipment or self-provided generators.

Copper smelters in Guangxi, where copper cathode capacity totalled 1.07 million mt in 2020, also told SMM that their production has not been affected by this power curtailment. 

In addition, copper processors in Yunnan and Guangxi kept normal production as well. 

The impact on Guangdong copper processors

Copper rod producers: SMM learned that copper rod plants in Foshan and Jiangmen have received notices from the local power supply department that they need to stagger power consumption.  Relevant copper rod producers told SMM that their production has not yet been affected. In addition, copper rod producers mainly use natural gas rather than electricity. 

Copper tube makers: Copper tube plants in Foshan, Jiangmen and Zhuhai have also received notices of power curtailment, and some plants have already been affected.  

Copper plate and strip producer: Copper plate and strip producers in Qingyuan and Foshan have also received power-cut notices. Some plants have to suspend production for 24 hours a week.  

Copper bar producers: Copper bar plants in Foshan and Jiangmen have also received notices of power curtailment, and some plants have cut output slightly. 

Cable and enamelled wire producer: Cable and enamelled wire plants in Guangzhou, Foshan, Dongguan and Shenzhen have also received power-cut requirements. Some of them have to take the mode of “five days on duty, two days off”, which has significantly affected their production. 

Home appliance sector: Home appliance companies in Foshan and Zhongshan have also received notices of power rationing, but the impact on large companies is relatively small. However, many small and medium-sized appliance companies’ production has been affected. 

To sum up, the electricity curtailment of China Southern Power Grid has no impact on upstream copper smelters, but it has more or less impact on copper processors in Guangdong, especially producers of copper tube, copper plate and strip, copper bar, cable and enamelled wire and home appliance that consume a lot of electricity. 

Power curtailment
Copper smelter
Copper processor

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