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“Winter is coming”

“Winter is coming”

Such are the strange new times, the range of problems is rolling. It’s not winter yet. And Europe and the UK are already suffering from gas shortages and wild speculative gas prices. Those who did not have contracts or stocks in advance may not make sense now, but there is a need. It’s not summer anymore. Problems are beginning and rumors are spreading about rising electricity prices. “Winter is coming.”

China is currently facing new challenges due to coal shortages. Namely, the production of heat and electricity in China depends on coal. It is rumored that its current reserves are barely enough for two or three weeks. At the same time, in our country and in the West in general, on the eve of winter, the demand for goods traditionally grows. And this promises Chinese factories to increase orders. To do this, they need even more electricity, so they need even more coal, which is almost non-existent with such speed of use.

Imagine (it’s pretty easy for us), somewhere in 20 of China’s 23 provinces face frequent and prolonged power shortages. This forces factories to reduce working hours per day and reduce the number of working days per week. Candles are used in shops and homes, and mobile networks are switched off for a while.
At the same time, news came of a ban on cryptocurrency transactions in China. This may seem irrelevant and independent. Mining accounted for only 1.1% of China’s electricity consumption. But this is in China. Here, only 1.1% is actually like the generation of 86 Terawatt-hours of electricity. This is equal to the ANNUAL electricity consumption of Finland or Chile! This is a saving. And only in cryptocurrency (by the way, this can slightly improve or compensate for the supply of video cards and SSDs).
China has pledged to be carbon-neutral by 2060 is growing. To extract the same cryptocurrency, more than 40% of the consumed electricity was extracted from coal. And the method of extracting electricity from coal for such an amount was accompanied by carbon emissions into the atmosphere for more than 63 tons of harmful emissions. Here it is not necessary to compare with Finland at all, and methods of extraction are other, and measures with inadmissibility of pollution are almost opposite. Recently, during the global restrictions in China in 2019-early 2020, the sky over Beijing flaunted its rare blue colors. However, it was temporary. Production has resumed, coal is being burned so that emissions are overshadowing the blue again. And there is still not enough coal.
Added to the solid tangle of interrelated causes and effects is China’s goal of hosting this year’s Winter Olympics. Therefore, reducing electricity consumption in the opposite way will reduce coal consumption and, as a result, reduce emissions and clean the air and clear skies over Beijing. “He who hinders us will help us here.” The temporary effects of coal shortages are playing into the Olympic goal of clear skies.

Given the range of confusing causes and consequences, the Chinese government’s state policy on “dual control over energy consumption” has recently been implemented. It already has some negative impact on the production capacity of Chinese companies and a positive one on the environment. As a result, the delivery of orders in some industries may be delayed or delayed. In addition, this September, China’s Ministry of Ecology and Environment published a draft “Autumn-Winter Action Plan to Combat Air Pollution for 2021-2022.” This fall and winter, production capacity in some industries will be limited for a long time. As a distributor and business partner of many companies, we have already received numerous reports of closures, chain disruptions and delays in delivery schedules. This can eventually lead to both rising prices and a possible shortage of products. Such threats have been discussed before. Now the trend is becoming more likely and faster.
To reduce the impact of threats and restrictions, it makes sense to make purchases as soon as possible if you have a purchase plan. Problems with the availability of free containers in China, with overloading of Chinese seaports and railways, with a shortage of workers in manufacturing and other areas have not abated and prices for logistics services have barely stopped rising, before coming down from their upper levels, and new challenges with coal energy and crypto-carbon effects give new impetus to an already wide range of problems. The times are such that good news in this direction should be well sought and expected. They should be, but not soon. Maybe in the summer of 2022?