Deadly Freeze in Northwest China Threatens Livestock And Heating

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(Bloomberg) — Plunging temperatures could be the next flashpoint for China’s commodities markets, after the coldest weather in the northwest in over a decade killed workers and livestock. 

Seven road workers died near the city of Altay at the weekend after blizzards struck the Xinjiang region, according to the Xinhua News Agency. Hundreds of sheep and cattle were also reported dead or missing in China’s main pastoral area, as well as over 200 livestock fatalities in neighboring Mongolia. 

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Temperatures have plummeted to as low as minus-47 degrees Celsius, according to Mongolia’s weather bureau. The extreme conditions are the worst of a cold front that’s sweeping much of China, lifting demand for heating fuels like coal, with some southern parts set to record drops of as much as 14 degrees, the China Meteorological Administration said.

The cold snap has helped steady coal prices after they dropped 11% last week amid worries that China’s return to lockdowns in several major cities would sap power demand. There’s also a risk that heavy snow could affect the transport of fuel from the coalfields in the northwest, which have already been strained by China’s measures to contain the worst virus outbreak since the pandemic began. In the first half of this month, sales from the top mining province of Shanxi tumbled 21%, according to the China Coal Transportation and Distribution Association. 

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The livestock losses in the north were caused in part by Covid rules that restricted the timely movement of animals and disrupted the supply of feed. Herds of sheep and cattle were frozen in snow as they foraged for food or because herders couldn’t get them to their winter quarters in time, according to reports.

The Chinese weather bureau also warned that farmers face a spike in heating costs for fruits and vegetables grown under cover as the cold front persists until the middle of next week.

The Week’s Diary

(All times Beijing unless shown otherwise.)

Wednesday, Nov. 30

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Thursday, Dec. 1

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On The Wire

China’s economic activity contracted further in November amid a record Covid outbreak, with growth likely to remain weak and the central bank expected to add more stimulus to bolster the recovery. 

After rebounding to pre-pandemic levels last year, air traffic in China has sunk back down to 35% of what it was in 2019 as officials continue to impose restrictions on travel as part of their fraught battle with Covid. 

Protests across China against Covid curbs underscore the complexity of the challenges facing President Xi Jinping and his new leadership team in 2023, says Bloomberg Economics.

—With assistance from Jasmine Ng.