From 2017 February 15th to March 15th, the central environmental inspection team did the first air quality inspections for 2017. As we reported last week, the inspections had a direct though small impact on the aluminum industry. Linfeng Aluminum and Power idled 50 pots and shut 28 pots till now because the environmental team were in Henan Province. Many Henan smelters got worried about they will be asked to cut capacity too.
From March 15th to 18th, together with the local environmental protection departments in Beijing, Tianjin, Hebei, Shanxi, Shandong and Henan, the Ministry of Environmental Protection sent another 18 teams to do special inspections on air pollution control work in 18 key cities. The inspections found 202 environmental problems.
Just as we predicted, another round of inspection is coming. From April, the central environmental inspection will start another check in 15 provinces, including Hunan, Anhui, Xinjiang, Xizang, Guizhou, Sichuan, Shanxi, Shandong, Tianjin, Hainan, Liaoning, Jilin, Zhejiang, Shanghai and Fujian.
This April, the central environmental protection inspection team will be stationed in Hunan. The check will last 3 months. The inspectors will also cover the inspections to three prefecture-level cities. The inspection times for the rest of provinces have not been disclosed.
The EPA is increasing manpower for all these inspections. The teams heading out in April are still in training school.
We have noticed the major aluminum production regions Xinjiang and Shandong had been listed in the April inspection target. Xinjiang has 19% of China’s aluminum operating capacity and Shandong has 30%, meaning that virtually half China’s aluminum capacity resides in just these two provinces. This may add an element of risk to the national industry if the environmental inspections keep returning to them. This is the 4th time Shandong province has been under the microscope since the middle of last year.
We believe the big smelters who have the environmental protection equipment might not be impacted much in the April check. The small smelters, small aluminum processing factories and relevant raw material factories may be more exposed to risks from the inspections.
Based on Mr. Chen Jining’s speech in Lianghui, there will be two more inspections after the March inspection. It means there will be at least one more round of inspection after the April check. The MEP’s target is to do environmental inspections to cover all provinces in 2017. For the areas that have the environmental problems, they will undergo rechecks by the environmental teams.
China experienced the heavy smog air pollution for at least two days in North China now. We believe the April environmental inspections will be a strict check. We will update the April environmental inspections information to our subscribers in time.