Let’s talk about the Beirut explosion. It’s only a small talk with some interesting information, please read it if you’re interested, otherwise, please feel free to skip itHong Kong Echo
(5 Aug) According to BBC, officials reported that the explosion at Beirut’s port is most likely linked to a large amount of ammonium nitrate stored for six years in one of the port’s warehouse.
After convening a defense conference, Lebanese President Michel Aoun suggested that the cabinet declare a state of emergency in Beirut. In a tweet, President Aoun stressed that it is unacceptable for these 2,750 tons of ammonium nitrate to be stored in the port's warehouse without any safety measures in place. Lebanese Prime Minister Hasan Diab also said he will investigate into the truth about this dangerous warehouse that has been there since 2014, and those responsible will be held accountable.
I'm speechless at these kind of official announcements. It just so happens that I am in the chemical industry. I am slightly more sensitive to the fluctuation of ammonium nitrate’s price than the general public. Around a decade ago, ammonium nitrate was still somewhat profitable, but it has been declining year after year.Do you know why I don’t even want to work with ammonium nitrate? Because of the overcapacity.
. . .
Who push the market to excess capacity? China!(eye-roll)
They've been running on overcapacity since 2012. At that time, under the encouragement of China state apparatus, people were producing ammonium nitrate like crazy, even when they were loss-making. In just a few years, they wiped out all the ammonium nitrate companies made by other countries, then began to fight amongst themselves. Yet they kept producing, until the situation was so bad that even their own people discussed and warned them (Figure 1). The funny thing is, the Chinese Communist Party (CCP) does not encourage people to farm at all; they prefer demolishing and bulldozing good lands [suitable for farming] to build buildings, for better prices.
What about overcapacity?
So our great “chief accelerator” [referring to President Xi Jinping], just like someone who suddenly wanted to start a party while having lunch, was probably eating a chicken drumstick lunchbox in 2013. He had a flash of inspiration and said he wanted to do a One Belt One Road project. As a result, his staff got busy, whitewashing the idea of the Belt and Road Initiative for the almighty President. Afterwards, it's the same as the stories we've seen. Rather than storing the ammonium nitrate in China, we might as well treat them as a favor, half-gifted, half-sold.It doesn't matter if the buyer doesn't have the money, Bank of China could be the syndicated loan guarantee and work as follow: I'll put my stuff in your house first, and you can pay back when you have the money – with 1.4 billion “leeks” (leeks refer to the Chinese that don't care/matter) who don’t care about politics, that's how the CCP does business. Plus who would refuse a free gift delivered to their door?
Therefore, China began its massive export orders (Figure 2), each hitching a ride on the Belt and Road project based on ties, shoving fertilizer into the warehouses of countries along the Belt and Road. 2014-2015 were the good years, soon foreign warehouses are full and they were telling China not to send out fertilizer anymore.As a result, Chinese fertilizer companies entered a period of huge losses again (Figure 3). In 2016, Sinofert suffered a loss of RMB 4.636 billion, Yuntianhua suffered a loss of RMB 3.3 billion, and the top 10 listed companies suffered huge losses of 10 billion. Because of the CCP's overwhelming hospitality, China and Lebanon signed the Belt and Road Initiative in 2017 (Figure 4).
If we think about it in normal logic, why would a country, and even the capital city Beirut, need to store 2,750 tons of ammonium nitrate fertilizer into its port warehouse, when it can't use that much, what idiot trader would import fertilizer like this?? Just like that, the fertilizer has been left unmarketable for six years, and then all this has happened.
After this explanation, you can probably understand why we, the ordinary citizens, need to keep an eye on politicians.Don't think you're safe in the capital; don't think you're family across the Taiwan Strait; and don’t think the Chinese officials are of high quality. They are all delusive thoughts. This piece of news clearly shows us that, just like the epidemic, if you don't care about politics, politics will come and kill you. Finally, I would like to remind everyone to look up the year of the Tianjin explosion (2015) and the chemical that caused the explosion. You can leave the answer in your heart.
By the way, wumaos (50 Cent Army) are already spreading rumors that the US did the bombing. Sigh! If you guys are so aggressive, you'll show your true colors, won't you?
Translated by: Hong Kong Echo
#China #BeltandRoadInitiative #Tianjin #Explosions #AmmoniumNitrate #Fertilizer #Beirut #Lebanon