Dual Control of energy consumption

On Aug 17, 2021, the National Development and Reform Commission, China's top economic planning body, rarely and directly pointed out that the energy consumption intensity of 9 provinces and autonomous regions increased instead of decreasing in the first half of the year compared with the same period last year. In addition, the reduction rate of energy consumption intensity of 10 provinces did not meet the progress requirements. It meant that more than half of the provinces failed to achieve the goal of controlling energy consumption and intensity in the first half of the year. The actions in various localities against the goal of controlling energy consumption and intensity, so-called "Double Control", began to arouse general concern in society.

The operating rate of spandex plants and downstream fabric mills was impacted by the Dual Control in end-Q3 and early-Q4. Coupled with weaker market atmosphere, the run rate reduced further in the fourth quarter.