Chinese players evaluate Beijing’s factory close or output cut order

According to media reports, Beijing municipal government ordered 1,200 factories to close or cut their output after the first red alert of the year for air pollution was issued last Thursday. The factories which received this order mainly operate in printing, construction materials and petrochemical industries, the reports showed.

Players in China evaluated the impacts of these factory closures as well as the output cuts and shared their comments.

A trader in China said, “The PP market sentiment is affected by the environmental pollution control issue, especially in Beijing, Hebei and Guangdong provinces. The red alert has affects for the short term, until the air quality index returns to acceptable levels. Meanwhile, transportation in these cities is also influenced.”

An ethylene based PVC producer commented, “After shutdowns and reduced operating rates in Beijing; Tianjin port was also affected; it was ordered to be closed for 5 days.”

Another trader offering PS and ABS stated that Beijing, Tianjin, Hebei, Shandong, Shanxi and Henan will undergo the most stringent environmental inspection in 2016, from December 16 to 21. “Factories that were found to be violating air quality regulations will have to reduce their operating rates or shut down their plants. Heavy haze caused highways to be closed and transportation came to a standstill. We think that this inspection will have more impacts on manufacturers rather than the producer side,” he commented.

An acetylene based PVC producer stated, “The air pollution that caused factories to close or reduce operating rates is not influencing PVC since the PVC market is not centered in Beijing. We are currently running our plant close to full rates.”