Global supply chains have been ravaged by an unforgiving series of disruptions. Power generation has been hampered by coal shortages and extreme weather in China. At the same time, Bitcoin mining activity was particularly power-hungry, amid a trading frenzy. Rising metals supply risk and a large global surplus point to structural frictions in the world of commodity trading, according to strategists at TD Securities.

Bitcoin miners further strained Chinese power demand

“While electricity generation problems were significant factors, Bitcoin's trading frenzy may have also contributed to the surge in power demand which ultimately forced Beijing to curtail smelters' output.”

“Regardless, China's Bitcoin mining ban should alleviate demand on the grid, while officials work to tackle power supply issues, which should also soon be addressed barring extreme weather.”

“More importantly for commodities will be the world's ability to correct the disruptions in the global supply chain.”

 

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