Recently many provinces and states in China deployed a strict electricity usage policy with a significant impact to the entire country. Many publicly listed companies have had to shut down their plants partially or fully. The electricity constraints are likely to continue for the rest of 2021.
Here is the timeline:
On August 17th, 2021, the Ministry of Ecology and Environment of PRC released an alert showing that some states had reached their limit for electricity consumption;
On September 16th, 2021, the Ministry of Ecology and Environment of PRC released a guideline to control electricity consumption;
Later, many states received a red alert to start deploying restraining orders in electricity usage.
Cloth, fiber and leather fabrication, construction (glass, concrete and steel) and petrochemical refineries are the areas with the most direct impact.
Display production plants are not yet affected.
However, many places are expected to extend the electricity constraints to the end of 2021. If the local government cannot reach its consumption standards, it may adopt more extreme measures for high electricity consumption and pollution industries in the coming months. Some indirect impacts may affect the FPD industry.
The first indirect impact may be an increase in the price of metals. The production of fine Al will be reduced; thus, the price of Al is likely to increase for the rest of the year. Al is not the only metal that is influenced by this policy. According to an environmental protection list released in 2018, many other metals used in FPD production are also considered as products with high pollution and electricity consumption. Those metals include Mn, Si, Cr, Ni, Cu, Pd, Mg, Au, etc. If the production of these metals is limited, the price will increase.
The price of chemicals will also increase. Because many chemicals used in display production are produced in petrochemical refineries, capacity reduction at these sites will reduce the supply of chemicals.
Some specialty gas prices could increase. For instance, SiH4 and BCl3 are used in FPD production. BCl3 is considered to be a product with high pollution and high electricity consumption. It is the same for SiF4, one of the raw materials to make SiH4. Similarly, PCB prices may be affected since PCBs are listed as products with high pollution and high electricity consumption.
The good thing is, so far LCD display industry haven't been affected directly by electricity shortage and we are ahead of our existing manufacturing. Our manufacturing unit is in Shenzhen and our province has taken necessary steps to provide stable electricity to our area.
But, in coming days the raw material price of the metal and rare earth materials can increase and hence can increase the overall price.
We are keeping an eye on the issue and will always communicate with our concern party if there is any shortage and if there is any price hike or any delay in production or shipment. We can ensure to our customers and brands that, we will always prioritize your order and will do everything to meet the deadline.
For any kinds of LCD, you can relay on Shenzhen Techstar Electronics. With our 22 years experience we can help you with your LCD need and can suggest the best LCD for your project. We have been working with some of the world's biggest brand and a lot of smaller brands home and abroad. From East Asia to Europe, from Russia to USA we have a strong footprint. From 1.2 inch to 10.1 inch whatever size you want, we can provide you with a perfect result.
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