Posted on 10/01/2021 11:17:55 AM PDT by MNJohnnie
China’s factory activity shrunk in September for the first time since February 2020, following sweeping curbs on electricity usage, according to China’s National Bureau of Statistics (NBS).
Data show the official manufacturing Purchasing Manager’s Index (PMI) in September was at 49.6, down from 50.1 in August. The economic indicator fell below score 50 for the first time in the past 19 months, which equals a decline in sector activity.
The 50-mark separates growth from contraction on a monthly basis.
“The manufacturing PMI fell below the critical point due to the low sentiment of high energy-consuming industries,” senior NBS statistician Zhao Qinghe said.
Thursday data indicate production dropped in September as the purchase price index of major raw materials was 63.5 percent, 2.2 percentage points higher than the previous month. It has risen to highs in the past four months. Raw prices of petroleum, coal and other fuel processing, chemical raw materials and chemical products, non-metallic mineral products have all risen sharply.
China is now in the grip of a power crunch as coal supply shortages, tougher emissions standards, and strong domestic demand push up coal prices to record highs. Some generators cut off power to reduce output or minimize losses.
Power rationing is currently taking place in at least nine provinces and regions. Local governments in major manufacturing hubs like the provinces of Zhejiang, Jiangsu, and Guangdong have asked factories to limit power usage or curb output.
Some power providers have sent notices to heavy users to either halt production during peak power periods that can run from 7 a.m. and 11 p.m., or shut operations entirely for two to three days a week.
Others have been told to shut until further notice or a particular date, including soybean processing plants in Tianjin city in eastern China which have been shut since Sept. 22.
The power cut is mounting more pressure on the manufacturing sector.
This week, Goldman Sachs lowered China’s economic growth forecast this year to 7.8 percent from 8.2 percent, citing energy shortages and deep industrial output cuts.
China’s factory output growth also hit a 13-month low in August, NBS recorded.
Yet the September composite PMI, including both manufacturing and services activity, rose to 51.7 versus 48.9 in August.
Apparently Government’s capacity for incompetence is global. How can anyone be short of coal after all the coal plant shutdowns in the US and Europe over the last decade?
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Could be a good bit of their coal comes from Australia which the CCP pissed off, combines with the CCP coal production quotas, and their command economy. The CCP is known for fixing problems that do not exist by creating another problem to fix the first.
Let them buy energy from their neighbors, the Ruskies!
“Could be a good bit of their coal comes from Australia which the CCP pissed off, combines with the CCP coal production quotas, and their command economy. The CCP is known for fixing problems that do not exist by creating another problem to fix the first.”
Yea, they’re trying to punish Australia because, unlike New Zealand, Australia won’t suck up to them. So they ‘punish’ Australia by not buying their coal. The problem they’re finding is that there’s no one to replace it. The US and Europe won’t allow the mining due to Global Warming (Australia previously told the rest of the world to shove it, regarding their coal production)...so China is left paying the price for their own attempt to punish others.
Considering that China now has the world’s largest navy and are building blue-water ships at 5 times our rate, and coupled with Biden installed, they’ll likely now just go to Australia and take what they need.
Shiny new infrastructure starting to tarnish? This may not be just about coal supplies. Charley don’t do maintenance. Watch what happens with the Shanghai maglev trains next.
Maybe Trump actually won the trade war.
Demand is down because there isn’t enough people in the US who are willing to work (deliver goods)?
You are right. Everyone here’s your answer.
Maybe their power plants caught Covid-19.
Unstated is the fact that the major foreign players are deserting China.
Samsung Ship building closed down costing 4,800 jobs and other korean companies are closing shop as well
Japanese industry has or is leaving
Ditto American and Taiwanese industry
“The US and Europe won’t allow the mining due to Global Warming”
I live in King Coal area. That is news to our local mines who are working 24-7 and begging for miners and cannot meet demand.
“I live in King Coal area. That is news to our local mines who are working 24-7 and begging for miners and cannot meet demand.”
Good to hear, but what the hell - those jobs pay VERY WELL, they should be able to shake some people off their couches (despite the handouts), even people who went to college.
Something funny going on...
Considering that China now has the world’s largest navy and are building blue-water ships at 5 times our rate, and coupled with Biden installed, they’ll likely now just go to Australia and take what they need.
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World’s largest navy, only if you count their fishing fleet and littoral ships ; they have only a nascent blue water fleet. But going to war is also unlikely ; they are untested ; the price would be extremely high in losses ; war would not do anything to maintain the survivability of the CCP itself.
They hope all their rhetoric, bluster, and threats will get them what they want without going to war, which would be an unmitigated disaster for the CCP.
Walmart and Harbor Freight hardest hit.
“Good to hear, but what the hell - those jobs pay VERY WELL, they should be able to shake some people off their couches (despite the handouts), even people who went to college.
Something funny going on...”
New miners have to go to school now and get licensed and then go through a red hat training period before being allowed undergound so many do not want to glo thropugh that and then be laid off in two years if super anti fossil fuel pres comes in.
Consol is hiring back retired miners. My cousin retired 5-6 years ago and is going back underground. The sign on bonus/package was incredible-he said tens of thousands. He just bought a brand new 30 foot sailboat for their lake cabin.
“Consol is hiring back retired miners. My cousin retired 5-6 years ago and is going back underground. The sign on bonus/package was incredible-he said tens of thousands. He just bought a brand new 30 foot sailboat for their lake cabin.”
Great to hear...although I hope we’re not exporting to China...
Two words Xi....Wind Power.
Low or high sulfur content?
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