China’s chemical sector is enjoying a profit surge, but continued prosperity is threatened by spreading power outages and the nation’s attempt to control carbon emissions.China’s National Bureau of Statistics says profits in the chemical industry rose by 145% in the first 8 months of the year, nearly tripling the average industrial profit increase.But the streak could be coming to an end. In recent days, at least a dozen stock market–listed Chinese chemical manufacturers—ranging from fertilizer producers to polyester fiber firms—have announced production curtailments due to lack of electricity.In addition, on Sept. 23, the US firm Celanese declared force majeure for several polymers after it was forced to shut down acetic anhydride and vinyl acetate facilities in Nanjing, in Jiangsu Province, to comply with government orders. Nationwide, thousands of chemical factories could be impacted by power cuts, says China Petrochemical News.The publication quotes several chemical firms’ executives in Jiangsu Province and the regions of Inner Mongolia and Ningxia as complaining that the unstable electricity supply is hampering maintenance, feedstock loading, and production safety.
I imagine this will have the effect of driving Chinese prices up, which will have further inflationary effects on the world economy. I think I expected inflation to pop up eventually, but how it's affected the global economy and why have been beyond me.