Recap of last week

If you’ve been following our almost daily emails you very well know last week was extremely eventful, but for those of you who haven’t here’s a brief recap:

The “fake news” meme travelled West to East. From the West Wing of the White House to Lake Yanxi in Beijing, so before lunch time on August 2, a fake news story got into the Chinese aluminium market.  Chalco was alleged to have mentioned in their management meeting that Weiqiao would be closing 2.6 million tons of capacity by October 15.  As soon as that story leaked, Shanghai took off, and so did Chalco’s share price.

August 3rd:

As recently as the end of June, we were quite skeptical about the strength of the initiative to cut illegal capacity. I remember pointing out to someone that Xinjiang Jiarun had slowed down their cuts, the local government in Xinjiang had removed the notice from their website, and even the 250Kt cuts at Hongqiao were only a token cut.

As recently as one week ago, we still thought there was some question about whether all the illegal capacity would be shut.  East Hope had slowed down their cuts, and the big two in Shandong province still had hopes of avoiding cutting all their illegal capacity…

August 4th:

What’s going on with Marpol VI?

China has designated all the major coastal shipping zones as areas needing special controls on the fuel used in those zones.  (We have maps of the coastal zones if anyone is interested.)

China has implemented a set of staged deadlines for the introduction of low sulphur marine fuel, with milestones running out to the end of 2019.  These will have the effect of ensuring that China is compliant with the IMO rules when they start in 2020.  However, that doesn’t mean that China is directly complying with the IMO.  The rules that China has laid out for itself derive from its fight against air pollution.

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