Daily Authority: Energy concerns, supply concerns 📉
15 minutes ago
🌄 good morning! German elections were held here at the weekend, and surprisingly, Berlin ran out of paper voting cards for a while because the Berlin Marathon was running with many road closures everywhere. Classic Berlin.
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It may be too early, it may not be more than a slip, but China is facing a power shortage and it is not getting any better. There will be a crisis of publications like. called Bloomberg.
Why it matters:
- As in most countries, energy rationing begins with large industrial consumers who are asked to reduce consumption when their energy supply is limited. The aluminum and cement industry is the first to experience suspensions, followed by other large manufacturers such as electronics.
- From reading the reports, it’s easy to see why: in some northern provinces, which now require heat during the cold, residents are feeling the effects of being asked to limit heating and the use of appliances like microwaves, what Politicians usually do try to avoid riots.
- According to reports, the problems affecting the global technology and automotive supply chain could worsen as key suppliers are forced to turn off electricity.
What’s up:
- the Nikkei Asia and others report that several key Apple and Tesla suppliers have ceased production at some of their Chinese plants. This has not yet affected Foxconn’s huge contract manufacturing facilities in Longhua, Guanlan, Taiyuan and Zhengzhou, the world’s largest iPhone assembly facility, but the suppliers for them will be restricted:
- “Eson Precision Engineering, a subsidiary of Foxconn – the world’s largest iPhone assembler – and a key supplier of mechanical parts for Apple and Tesla, announced on Sunday that it will cease production Sunday through Friday at its facilities in the Chinese city of Kunshan Has.”
- “Unimicron Technology, a major PCB manufacturer and major Apple supplier, said its subsidiaries in the Chinese cities of Suzhou and Kunshan in Jiangsu Province would also have to cease production from Sunday noon until the end of the month.”
- The manufacturer of iPhone speaker components, Concraft Holding, also switched off according to a statement on the stock exchange.
- Intel, Nvidia and Qualcomm could also be affected, with “several major providers of chip packaging and test services” stopping production for days.
The energy problem:
- Summing up why there is an energy crisis looks complicated.
- Both coal and natural gas prices have become expensive in China and around the world.
- Beijing is enforcing stricter emissions standards and the country “pledged” to cut energy intensity by 3% in 2021 to meet climate targets and “penalized” provinces for failing to comply with energy restrictions.
- In addition, the Olympic Winter Games will take place in Beijing next February. The country is aiming for clear skies to avoid scenes where pollution is affecting the event and how the world sees China.
- But things aren’t exactly looking good: other reports suggested Beijing is now asking food processors (like soybean grinders) are shut down.
- Expect to hear more in the coming week.
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