China’s Chemical sector is seeing a profit rise, but the country’s sustained success is jeopardized by widespread power outages and the country’s efforts to reduce carbon emissions.Earnings in the chemical sector increased by 145% in the first eight months of the year, nearly doubling the average industrial profit gain- says China’s National Bureau of Statistics.
However, the run may be coming to an end. At least a dozen Chinese Chemical businesses, ranging from fertilizer makers to polyester fiber firms, have declared production curtailments owing to a scarcity of energy in recent days.Furthermore, on September 23, the US Company Celanese announced force majeure for numerous polymers after being compelled to close acetic anhydride and vinyl acetate plants in Nanjing, Jiangsu Province, to comply with government directives.
Firms in the eastern provinces of Jiangsu and Guangdong, which are home to many of China’s Chemical manufacturers, are suffering the most, as these provinces have failed to meet the central government’s dual targets of reducing energy use per capita by 3% per year and controlling total energy consumption growth.The energy reduction objective, which is linked to China’s overall carbon emission reduction goals, is merely one of the causes of power outages. Furthermore, with coal costs soaring and government-capped energy rates, China’s power firms are hesitant to produce additional electricity at a loss.