Overnight there has been a very good IEA report on how China could get to net-zero by 2060, and further news of more industries hit by power cuts because of power shortages, some of which are apparently due to tighter emissions standards. These are both important and far-reaching topics and will require some analysis to provide the kind of insight that we believe is necessary, and accordingly, we will push these to next week’s report (all input welcome). In the meantime, we have included a couple of charts that show the way up and the IEA view of the way down. The power outages are interesting as while they may cause some manufacturing cutbacks and we have seen recent news to that effect, China has overbuilt in the last couple of years relative to domestic demand growth, and with port and shipping congestion the country has surpluses of many products sitting around at very low values. The power moves may help correct some of these imbalances and we are already seeing some chemical prices bounce off recent lows because of production cutbacks. We discussed the acetic acid chain in one of our dailies last week – linked here.
