Compression capacity

Since September, the phenomenon of power cut in domestic has spread to more than ten provinces including Heilongjiang, Jilin, Guangdong and, Jiangsu. On the afternoon of September 27th, the State Grid Corporation of China stated that in view of the current power supply situation, it will take comprehensive measures and take multiple measures, and go all out to fight the tough battle of power supply guarantee, guarantee basic people’s livelihood power demand, and avoid the possibility of power supply restrictions. Resolutely maintain the bottom line of people’s livelihood, development and security.

The current power rationing phenomenon not only affects the production of industrial enterprises, but also affects the daily lives of residents. The most intuitive reason for the current power rationing is that due to the recent tight power demand, the grid companies have taken countermeasures to ensure the safety of the power grid. Contrary to the supply-side downturn, since the outbreak of the new crown epidemic, overseas manufacturing has been significantly restricted, and my country’s export patterns have continued to improve. The production of industrial enterprises has boosted the rapid growth of power consumption, which has increase the imbalance between power supply and demand. As a last resort, the method of “restriction of power supply” was used to fill the gap and ensure the safety of the power system. The range of power restrictions may be further expanded.

Power cuts are conducive to production capacity compression. Due to the epidemic, a large number of foreign trade orders have flooded into China, and many companies have reduced prices to win orders. Although there are more foreign trade orders, the profits earned by enterprises decrease with price cuts. Once the foreign trade orders decrease, these enterprises are bound to face the risk of bankruptcy. Power curtailment can reduce the risk of these companies going bankrupt, because power curtailment will cause companies to limit production, thereby reducing production capacity, allowing companies to gradually discover their core products, promote corporate transformation, and be more conducive to corporate development.

Post time: Jun-03-2019