Recently, the “dual energy consumption control” policy has continued to ferment. From a historical perspective, this round of power and production restrictions may force many small and medium-sized enterprises with high energy consumption to either withdraw from the market or transform and upgrade. However, pain is inevitable, and the industrial structure may have to be reshaped.
Textile listed companies are affected
On September 24, as soon as the A-share market opened, the light manufacturing, energy and power sectors went crazy. The direct cause of the surge in these two sectors is power and production restrictions. Jiangsu and Zhejiang provinces are China’s printing and dyeing centers. Shaoxing alone accounts for half of Zhejiang Province’s printing and dyeing production capacity. Once the Shaoxing printing and dyeing factory stops working, it is equivalent to one-third of the country’s printing and dyeing production capacity going out of business.
When supply-side production capacity is limited, raw material prices rise sharply. Changshu Printing and Dyeing Chamber of Commerce in Jiangsu Province issued the “Notice of Adjustment of Dyeing Fees”, requiring member companies to uniformly increase printing and dyeing fees by no less than 1,000 yuan/ton starting from October 1.
The Tongxiang Sweater Dyeing and Finishing Chamber of Commerce in Zhejiang Province issued “About Adjusting the Dyeing and Processing Fees for Hank Yarns” “Letter”, requiring printing and dyeing processing fees to be increased uniformly by 500 yuan/ton.
From the perspective of sector trends, most of the listed companies have experienced larger declines in the chemical subsector. The main reason is that the news of dual energy consumption controls and power and production restrictions have increased the market There is panic and concern that the performance of chemical companies will be seriously affected. Among them, printing and dyeing concept stock Yingfeng Co., Ltd. and A-share companies such as Jujie Microfiber and Nanjing Chemical Fiber in the chemical fiber sector temporarily suspended production due to the power supply.
On the evening of September 22, Yingfeng Co., Ltd. announced that in order to alleviate the coal inventory situation and ensure the safe and orderly production of heating and heating enterprises, the company’s Keqiao, Shaoxing City The thermal power enterprises in Ma’an Street in the district plan to gradually reduce the heating load, and the heat-consuming enterprises will suspend production in stages.
According to relevant requirements, Yingfeng shares will temporarily suspend production until September 30. The company estimates that the production capacity during this temporary suspension will account for approximately 3% of the company’s total annual production capacity and will not have a significant impact on its total annual output and normal production and operation activities.
On the same day, Ximen Gate, a functional fabric manufacturer also located in Keqiao District, also announced that due to tight power supply, Zhejiang Province has recently implemented electricity load reduction for key energy-consuming enterprises within its jurisdiction, and has suspended production of key energy-consuming enterprises under the premise of ensuring safety. It is expected that the shutdown will last until September 30. Xidamen said that it is currently forced to temporarily suspend production, which is expected to affect the output of sunshade fabrics by about 115,400 square meters per day. The specific impact on benefits cannot be accurately estimated at the moment.
Different from the adjustment in the chemical industry last year
This dual control is reminiscent of the chemical industry in the second half of last year. Under strict environmental protection policies, a large number of high-energy-consuming, high-pollution chemical companies were ordered to suspend production and relocate. Then the prices of chemical raw materials skyrocketed.
In the post-epidemic era, the economy has recovered rapidly, demand for chemical raw materials has surged, production capacity has been suppressed, and manufacturers and dealers are hoarding goods. Chemical companies, which have been neglected for a long time, have ushered in a cycle of crazy increases in both volume and price.
Nowadays, power and production restrictions have once again detonated light industrial manufacturing, which has the same effect as the supply-side reform of chemical companies. In the context of the “carbon neutrality” strategy, high-energy-consuming, high-pollution industries such as chemical industry, light manufacturing, and coal power and energy are all key industries that need to be vigorously adjusted by policies. What should be relocated must be relocated; what should be upgraded must be upgraded; what should be shut down must be shut down.
However, this year’s power and production restrictions are somewhat different from last year’s chemical industry rectification. In terms of the adjustment of chemical companies, the Chinese government has taken a heavy blow, shutting down thousands of illegal chemical companies, and relocating and rectifying thousands of chemical companies. However, in terms of light manufacturing, the main measures are to limit power supply and production, and there is no order to shut down.
The “correction” policy is advancing
National Development and Reform Commission spokesperson Meng Wei said at a press conference on August 17 that since this year, various regions and departments have actively promoted carbon peaking and carbon neutrality and achieved certain results. However, in some places, industries, and enterprises, the focus of work has “deviated”. Among them, some places have implemented a “blanket” shutdown of high energy-consuming projects, and some places have even launched “two high” projects in violation of regulations. The problem of construction before approval is more prominent. “These phenomena run counter to the original intentions and requirements of carbon peaking and carbon neutrality, and must be resolutely corrected.”
On September 16, the National Development and Reform Commission issued the “Improving Energy Consumption” The “Dual Control System Plan for Intensity and Total Volume” (hereinafter referred to as the “Plan”) gives more flexibility to the total energy consumption target. While resolutely controlling high-energy-consuming and high-emission projects, it also proposes that “the national level reserves a certain amount of total energy consumption.” Quantitative indicators, �”Coordinate and support the energy demand of major national projects and the development of renewable energy”, as well as a series of flexible measures such as “dual-goal” management of basic goals and incentive goals.
In this regard, Some experts believe that the dual energy consumption control target has become the baton for my country’s energy transformation in the past decade, but there are also problems such as a lack of flexibility in total management and a lack of differentiated management measures for dual energy consumption control. The “Plan” proposes to further improve the use of energy consumption. The system of paid use and trading of energy rights and accelerating the construction of a national energy rights trading market will provide local governments with greater flexible energy use space. In addition, the “Plan” encourages local governments to increase renewable energy consumption and clearly exceeds the minimum renewable energy power consumption. The consumption amount of the responsibility weight is not included in the current total energy consumption assessment of the region’s annual and five-year plans. This means that reducing energy intensity is the first and core goal to adhere to, while the control of total energy consumption has certain limitations. “Immunity”.
In response to the rapid rise in prices of some commodities, the National Development and Reform Commission, the National Energy Administration, the Ministry of Industry and Information Technology and other departments have recently issued policies Measures, ranging from policy implementation to power plant inventory systems, promote the work of ensuring supply and stable prices of coal, fertilizers, etc.
As required, relevant supervision work to ensure supply and stable prices will be Illegal price behaviors such as malicious hoarding and price gouging shall be investigated and dealt with in a timely manner in accordance with the law. At the same time, in response to the difficulties and problems encountered by enterprises in releasing advanced production capacity, we will go deep into enterprises and relevant departments to promote the implementation of various requirements for “delegation, regulation and service” to help enterprises coordinate and solve problems. Outstanding issues affecting the release of production capacity.
What can “dual control” bring? When Marginal relaxation?
In recent years, international commodity prices have soared, and China’s production capacity expansion has not brought about high profit growth, especially in the light manufacturing industry.
Relevant experts said that China’s light manufacturing industry has been in a low-profit state for a long time, and most of the profits have been taken away by international big brands. Production restrictions can improve the role of China’s light manufacturing industry in the international supply chain. Bargaining power.
On the other hand, the United States purchases Chinese goods and hoards large quantities of materials by issuing excessive currency. The Chinese central bank must exchange the U.S. dollars earned by Chinese companies from the United States. Equivalent to the RMB. The final result is that the Americans bought a large amount of materials from China with a pile of waste paper. On the other hand, Chinese manufacturers continue to expand production, resulting in an unhealthy production capacity explosion. Once a global deflationary crisis occurs later , then many manufacturers may have a crisis due to blind expansion of production in the early stage.
With the influx of hot money, China The large-scale expansion of light manufacturing will cause huge production waste once overseas orders decline. What China needs to expand now is mid-to-high-end manufacturing, not low-end manufacturing. As China’s industrial upgrading gradually deepens, it is an inevitable trend for some low-end manufacturing industries to move out. In the process of China’s industrial upgrading, the blind expansion of low-end industries is not in line with the trend of my country’s industrial development.
CITIC Securities research report stated that judging from the objective operating status of the economy, as overseas supply recovers in the future, the global supply and demand gap is expected to narrow, and China’s exports will naturally fall back, which means The high increase in energy consumption caused by this year’s rapid industrial growth is unsustainable. From a short-term perspective, mid-to-late September is the assessment time point at the end of the third quarter, which may be a small climax of the production and electricity restriction policy. It cannot be ruled out that there will be marginal relaxation after October. Many companies that have suspended production due to government restrictions have given guidance that production will be suspended until September 30, which may be used as a side confirmation. </p
