Blackouts and power cuts in the world’s second-largest economy have drawn attention to fuel supply problems that could complicate the country’s pandemic recovery.
Struggling energy companies in China have cut off power to select Chinese industrial players in recent days as the high price of fuel pushes the firms to ration power supplies. Traffic lights and street lamps went dark in many cities in China in recent weeks. Sales of candles skyrocketed as millions of homes and businesses went without power.
Shortages currently plaguing Europe, the UK and now China can give the impression that a global energy crisis has begun. While some of their problems overlap, so far China is the only one this year to report widespread power outages.
China is the world’s top consumer of coal and, unsurprisingly, the world’s biggest producer of greenhouse gases. Beijing recently made reducing the country’s carbon emissions a top priority, with the aim of reaching carbon neutrality by 2060. This led to the country curbing domestic coal production, even while over 70% of the country’s electricity, according to Bloomberg, is still sourced from coal.
So now coal prices are skyrocketing. Unlike in Europe, where consumers are worried about spiking heating costs this winter, utilities’ prices in China are largely regulated by the government. This keeps power companies from passing on the cost to consumers and sticks the suppliers footing the high cost of the coal needed to generate electricity. To cope, many companies have opted to scale back production, curbing the country’s supply of energy.
Further, China’s push to host a “green” 2022 Olympics and Paralympic Winter Games is expected to boost clean energy demand including natural gas consumption over the coming winter-spring heating season, but this has also raised concerns about costlier natural gas as global prices surge to record levels.
Reference:
https://www.spglobal.com/platts/en/market-insights/latest-news/energy-transition/091521-analysis-chinas-green-winter-olympics-2022-to-boost-natural-gas-demand
https://www.dw.com/en/china-reaches-for-strategic-power-cuts-amid-energy-crisis/a-59367176
Given the evolving on-ground situation and newer variant-led infections, the pandemic is far from over. In such a scenario, for businesses to stay relevant, we will need to be flexible and more adaptable to the changes that need to be embraced to keep core business growth drivers resilient.
As the chemical industry moves into 2022, strong demand for both commodity and specialty chemicals should keep prices robust throughout the year. The industry could face margin pressures amid raw material cost inflation, which will likely remain high through the first half of 2022.
The Federation of Indian Export Organizations (FIEO), an apex body of Indian export promotion organizations, has urged the government to provide freight support to all exports including pharmaceuticals till 31st March 2022, as freight rates have skyrocketed and are likely to somber by March 2022.
Science keeps winning! Scientists recently transplanted a pig’s kidney into a human being without immediate rejection by the immune system.
In a landmark announcement, the World Health Organization (WHO) has recommended the use of the first-ever malaria vaccine for children. WHO Director-General Tedros Adhanom Ghebreyesus endorsed the RTS,S/AS01 malaria or Mosquirix – a vaccine developed by British drugmaker GlaxoSmithKline (GSK).
China’s power shortages hit growth in the world’s second-biggest economy, threatening more pain for global supply chains, while Europe’s gas squeeze looked set to continue as Russia’s Gazprom showed no sign of hiking exports to the region in October.
The fact that 22 such molecules are going to come out of their patent period will substantially expand the offerings of the Indian companies to people at home and abroad alike and may help fetch extra revenue.
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The United States has been pushing India to restart vaccine exports as it looks to stem the global spread of the Covid pandemic.