Manufactured Energy Crisis Continues in China - The New Normal

Just yesterday we warned that a “Power Supply Shock Looms” as the energy crisis gripping Europe – and especially the UK – was set to hammer China, and just a few hours later we see this in practice as residents in three northeast Chinese provinces experienced unannounced power cuts as the electricity shortage which initially hit factories spreads to homes.


People living in Liaoning, Jilin and Heilongjiang provinces complained on social media about the lack of heating, and lifts and traffic lights not working.

Northeast China's Shenyang, capital of Liaoning Province has been through a sudden and unexpected power curb. Meanwhile, dozens of provinces across the country are also facing power curb due to govt's pursuit to cut carbon emission even though the supply for coal remain adequate. pic.twitter.com/cX2h0x6s8Q — Source Beijing (@SourceBeijing) September 26, 2021

Local media in China – which is highly dependent on coal for power – said the cause was a surge in coal prices leading to short supply. As shown in the chart below, Chinese thermal coal futures have more than doubled in price in the past year.


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