Power outages continue to ripple through large parts of China as a country grapples with a shortage of coal and other energy fuels forcing factories and malls to close early or to close completely. Raw material processing industries have also been hurt with steel, aluminum and cement taking the hardest hit so far with about 7% of aluminum capacity suspended and 29% of the national cement suspended. Outage have been occurring across much of China's Northeast region, home to large industrial factories.
Producers of chemicals, dyes, furniture, electronics and soymeal have also been affected. Factories that produce the iPhone and other electronics have seen shorter work days and temporary shut Downs as China seems to be unable to stop the rolling blackouts.
As the country has been shifting to more cleaner energy sources and away from coal, the number of power plants still able to operate has dwindled because many coal factories have been shut down. Continuing economic trouble is China Evergrande which continues a massive real estate and economic fallout bringing down several other large Chinese companies.
Morgan Stanley said if China doesn't fix the situation soon, it would begin to reduce the countries GDP. Large residential areas have also been experiencing outages. China has said it is directing efforts to ensure people have power in their homes at nights as winter in some parts of northeast China has already arrived.
"Basically, power generation capability has fallen behind power consumption and demand," said Jamie Chavez, a Bank of England economics and commodity researcher.