Further to our post of about an hour ago, I just wanted to highlight one specific dot point in the new regulations about carbon companies.
According to the new regulation, carbon companies who do NOT meet the standards will be ordered to close. Fair enough, but here’s the rub – carbon companies who DO meet the standards will be ordered to close up to 50% of their capacity.
Yes, they will be penalized even though they are meeting the emissions standards.
This limitation will apply during the “heating season”, beginning mid November 2017, and running through to mid March 2018. In fact, carbon companies that we spoke to this morning reported that they were already under some similar restrictions this winter, and were keen to get the next 15 days out of the way. The heating season closes when central heating is turned off, March 15.
It’s still too early to say what the full impacts will be. Several of our usual contacts are presently in San Diego for TMS, and couldn’t be reached. But the impact will be driven primarily by the extent to which smelters are also penalized. If they have to reduce by 30%, then the impact will be reduced. But either way, exports of carbon products could be at risk.