China’s factory gate inflation rose to a record high last month, due to soaring coal prices amid a nationwide power crunch.
The price of goods when they leave the factory, known as the producer price index, rose 10.seven percent in September, compared to a year earlier.
It marks the biggest rise, since related data was first compiled 25 years ago.
The major factor coal shortages is partly attributed to China's green ambitions, that are restricting the production of coal.
Government controls on how much producers can charge, and import disruptions stemming from its tensions with Australia, have further restricted energy supplies.
Plus, there's surging global energy prices to consider, due to rising demand caused by economies reopening from COVID-19 closures.
Meanwhile, China's renewable energy supply has fallen, after a severe drought hit the hydropower sector in the summer.
Adding to price pressures, the power crunch has disrupted output across cement, steel and aluminum industries, which include companies supplying big global brands like Apple.
And many South Korean factories are also affected.
According to Yonhap News, South Korean steel maker POSCO's factory in Jiangsu Province, is barely keeping its operations at 80 percent of normal, after being forced to shut down in late September.
And many companies are requesting local governments to supply at least 50 percent of power.
All this is prompting concerns of a potential disruption in the global supply chain and global inflation.
It is already posing a major challenge to the Chinese economy which is in the middle of a property market crisis.
Lee Kyung-eun, Arirang News.