Weifang closures - more to it than meets the eye

Some clients have reported receiving an English translation of a document issued by the Weifang local government, announcing closures of calcining plants until March 31.

The document is real and the orders to close are authentic. But there’s more to the document than what some might realize.

The Weifang local government has ordered several industries to close capacity, with the document citing insufficient progress in the fight against air pollution. The ruling orders carbon plants and carbon black plants to close down completely, while other industries have to close between 30% and 50% of their operations.

The reason for this rush to close factories is because the environmental inspection teams are in the area. As we have reported to our clients previously, the Ministry of Environmental Protection has moved to strengthen the weakest part of the efforts to fight pollution - the local governments themselves. Since the MEP criticized local governments for their lack of progress, the response has been to act or even over-react. As we reported earlier today, a local government in Henan province did the identical thing - close factories for the duration of the team’s visit.

That’s what makes this recent move troubling. Weifang local government has taken these factories out for 3 weeks, as some sort of temporary reaction to appease the Beijing authorities, though it makes negligible difference to pollution. And there’s every likelihood that other counties will do the same as Weifang and Linfeng - random closures to impress the inspection teams.

When one talks about carbon plants in Weifang, one immediately thinks of two major exporters. We understand that the order has caused both companies to shut at least some capacity. We will provide our subscribers with more detailed information about exactly what is happening.

We also understand that there have already been at least 2 shipment defaults in recent times and there may have been a third, but we are still confirming.

The action to close carbon black plants is also a concern for those involved in coal tar pitch. We are still investigating this part of the ruling, and the implications for customers.

Our clients and subscribers are invited to contact us to discuss these developments, as there is an amount of information available that we cannot put into print. enquiries@az-china.com.