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Chinese players debate impact of upcoming G20 summit on polymer markets

by ChemOrbis Editorial Team -
  • 09/06/2016 (03:49)
Players in China are currently debating about the likely impact of the upcoming G20 summit on the country’s polymer markets. The Chinese government is reported to be requiring factories near Hangzhou, where the summit will be held, to restrict their output in order to ensure the city is ready to meet environment quality requirements ahead of the summit.

A trader active in the PVC market added, “Factories in the Hangzhou area have been gradually reducing their operating rates since the May announcement that the G20 summit would take place in Hangzhou this year. However, we do not expect this to generate any major shift in the supply-demand balance as end product producers will be required to limit their activities along with polymer producers.”

A converter manufacturing plastic bottles stated, “The upcoming G20 summit in Hangzhou will limit production in the area as the government will be strictly enforcing environmental quality regulations. While several PET plants may be affected by production outages, we do not expect any major disruptions to the market as players will be able to plan their sourcing strategies in advance.”

While some players are not expecting a major impact on the market, others believe that local supply restrictions may push prices higher. A Chinese PP trader commented, “Operating rates at domestic PP plants have been reduced recently and the restrictions on factories ahead of the G20 summit may lead to further shutdowns. We believe that this factor has helped push PP futures prices higher and has helped encourage some stabilization in prices in the PP market.”

A source from a South Korean ABS producer also predicted firmer prices resulting from shuttered production ahead of the G20 summit. “Production restrictions in the Hangzhou area are likely to push up ABS prices in the local market, which will hopefully create some additional sales opportunities for overseas producers,” the source commented.
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