"Energy consumption dual control" - the chemical industry is the most widely affected

On September 16th, the National Development and Reform Commission (NDRC) released the "Plan for Improving the Dual Control System of Energy Consumption Intensity and Total Amount" (hereinafter referred to as the "Plan"). Subsequently, Guangdong, Jiangsu, Zhejiang, Shandong, and other regions introduced stricter policies on power and production restrictions, including limiting power during non-working hours in some factory areas, arranging enterprises to shift production to off-peak periods, and suspending production for half a month in high-energy-consuming enterprises. These policies were implemented in mid-to-late September. 
        The current energy consumption dual control policy may be related to the incomplete achievement of the energy consumption dual control targets set for the 13th Five-Year Plan period. According to the "Barometer of Regional Energy Consumption Dual Control Target Completion in the First Half of 2021" released by the National Development and Reform Commission, less than 40% of the regions have achieved the energy consumption reduction progress, significantly lower than the average of 90% since the implementation of the 11th Five-Year Plan. Nine provinces (including Guangdong, Yunnan, Jiangsu, etc.) have seen an increase in energy consumption intensity instead of a decrease.

In terms of the number of listed companies affected by power restrictions, the chemical industry is the most extensively impacted. Guangdong, Jiangsu, Zhejiang, and Shandong are major chemical provinces, while Sichuan, Hubei, Yunnan, and other regions also boast numerous chemical industry chains such as titanium dioxide and yellow phosphorus, involving more than 10,000 chemical enterprises. Power restrictions and production quotas have driven up the prices of all chemical products. According to data from Business Society, the prices of caustic soda, refrigerants, and calcium carbide have increased by 12%, 11%, and 7% respectively over the past seven days. Meanwhile, downstream enterprises are facing the dual pressures of price hikes and stock shortages.