Gas shortages are spreading to industrial sectors in southern and western China after authorities in Beijing diverted the fuel to the north to resolve a shortfall caused by a botched effort to cut coal use. Chemicals producers in Sichuan and Chongqing, in China’s southwest, have been ordered to shut or curtail production until March, heightening the economic impact of the disruption, the Financial Times reports.
On Tuesday, German chemicals group BASF declared force majeure on products made at its chemicals facility in Chongqing, affecting the supply of the compounds used in Spandex among other products. “Spandex will be tight,” an industry executive quipped. The National Energy Administration has taken over gas allocation from state-owned oil companies in an effort to coordinate an increasingly complex set of diversions to mitigate the shortfall. Beijing moved to cap gas prices in late-November after demand jumped in northern China following the onset of cold weather.