Printing and Related Industries Hit by Power Shortage: Hold On or Give Up?

Under the squeeze and mutual resonance from both the supply and demand sides,

the large-scale power shortage of the year has arrived ahead of time. The China Electricity Council warns that during the summer peak period the power gap is conservatively estimated to reach

ten thousand kilowatts, and may widen further. The CEC says,

the largest power shortage China has faced since the year, unprecedented in both scope and depth.

Power shortages come every year, so why is this year's so unusually early?

Before the peak power-consumption period even arrived, electricity loads in various regions were sounding alarms one after another. The reasons are linked to the repeated failure to curb high-energy-consuming industries, the severe drought in the south that hampered hydropower production, and the inversion of coal and power prices that left thermal power companies with losses exceeding revenue.

Besides the imbalance between supply and demand that leaves generation unable to keep up with electricity demand, it should also be noted that after most provinces, autonomous regions and municipalities completed their

energy-saving and emissions-reduction targets, controls on shutting down, suspending or restricting high-energy-consuming enterprises have loosened; the rise in orders at such enterprises will inevitably push up electricity use at export-oriented firms. In addition, the economic recovery has also raised corporate electricity demand.

The Impact of the Power Shortage on Printing and Related Industries

, then the emergence of a power shortage will inevitably lead related industries to cut output to reduce losses, which in turn drives prices up to make up for the profit lost to power-shortage production cuts. Following this logic, industries including chemicals, steel, cement, coal and diesel engines have all responded.

Take the chemical industry as an example: historical experience shows that chemicals is an industry deeply affected by power rationing; tight power supplies will to some extent affect downstream demand, while some chemicals with a high share of electricity costs will see prices pushed up by costs.

Another example is the big energy consumer

steel, which bears the brunt. Data show that steel accounts for roughly of total electricity demand,

making it the largest electricity-consuming industry. At present,

the problem is mainly regional power tightness, concentrated in East and South China. But the power shortage's impact on the basic steel industry is more complex. Although in the short term power rationing will ease the

continued expansion of steel supply, it may also affect downstream demand for steel, so there is likewise a later

Printing and Related Industries Hit by the Power Shortage: Hold On or Give Up?

First, power rationing will put further pressure on papermaking capacity, and in the coming

quarters, paper supply will fall faster than demand. On the question of enterprise electricity use, Wu Yanfang, securities affairs representative of Jingxing Paper, said:

As of now there has been no power rationing; as the largest local enterprise, the government will certainly take the company's electricity use into account. The company's paper prices were just raised at the

end of the month, by roughly

. For the papermaking industry, there is no doubt that power rationing will bring some revenue growth, especially for companies that generate their own power.

Second, the author believes power rationing may increase the burden on printing enterprises, as noted above, power rationing will push paper prices up again. For the printing industry, paper,

and other items are no small expense. As the market's demand for

polymers, solvents and fabrics increases, the cost of

raw materials alone has already been rising one after another, and Flint Group and Sun Chemical, these two

giants have already, on

and auxiliary materials, implemented price increases. Add to that the paper price rise the recent power shortage will cause, and it is undoubtedly another heavy blow to the industry.

But with the arrival of the nationwide peak power-consumption period, together with the steady climb in raw material prices over recent days, this will inevitably have a major impact on the industry and deal a devastating blow to a group of high-energy-consumption, low-capacity enterprises; by then it will help drive a reshuffle of the entire printing and related industries, help raise printing companies' awareness of energy saving and emissions reduction, and promote healthy, orderly development of the printing industry.

Therefore, enterprises are advised not to be blindly discouraged by the temporary crisis the power shortage has created for the whole industry, but to start with themselves, raise their awareness of energy saving and emissions reduction, and improve energy-saving

and measures, so that they can remain undefeated at the crest of the industry's great reshuffle.

——This article is reprinted from China Packaging Network (pack.cn), original link: http://news.pack.cn/show-369986.html