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Why China has to ration electricity and how that could affect TPU price
October 15 , 2021

Recently, the National Development and Reform Commission announced that the energy consumption intensity of nine provinces and regions increased in the first half of the year instead of decrease! In addition, the reduction rate of energy intensity in 10 provinces did not meet the schedule requirements, and the national energy conservation situation is very severe. As to balance electricity supplies with demand, parts of china has hit by power cut.

Why China is struggling with a severe shortage of electricity?

thermal coal has tripled in price because of coral shortage which caused by mining volumes dropped by as much as 17.7% and Coal consumption shot up. those higher coal prices would have been passed on to energy consumers. But the higher coal prices have forced power plants to the brink of financial collapse because mismatch of coral price and electricity price. So, coal-fired power plants have simply shut down and china is struggling with a severer shortage of electricity.

How ration electricity could affect TPU supply

Homes and businesses have been affected by power cuts as electricity has been rationed in several provinces and regions. To the south, factories have been cut off from electricity for more than a week. The lucky ones are rationed three to seven days of power at a time.

1. Strictly control the scale of chemical production and other production capacity, and promote the relocation of high-energy-consuming processes

Strictly control the scale of petrochemical, steel, chemical and other production capacity and promote high energy consumption processes move out. Strictly control the production capacity of textile printing and dyeing, chemical fiber, plastic products and other manufacturing industries, adopt advanced production technology, increase the proportion of high value-added products, and greatly increase the energy efficiency level of unit value added. Promote the withdrawal of production capacity in textile printing and dyeing, chemical fiber, papermaking, rubber and plastic products, electroplating and other industries, increase the elimination of backward and excess capacity, and complete the rectification of "scattered and polluted" enterprises.

2. The production capacity of a variety of chemical products is restricted, and 10,000 chemical companies have encountered production stoppages. It will led to great shortage of TPU material and price of TPU material and price of TPU will rise

3. Rationing delays supply chains

The power rationing has created long delays in global supply chains that rely on Chinese factories. It also affect TPU resin supply and TPU material supply.

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