Chinese players evaluate possible impacts of 19th Communist Party Congress

Players in China are sharing their ideas on possible impacts of the 19th National Congress of the ruling Communist Party of China that took place on October 18 this year. The congress is traditionally held in every five years and provides an insight to the vision of the country on several fields, including economy.

For polymers sector, the congress is crucial in terms of the policy to be determined about the environmental inspections which continue in China strictly. The ongoing inspections have been pulling operating rates down at many producers’ plants.

A source from a PVC producer noted, “Environmental inspections are really stricter this year when compared to before. We were informed that several producers in the northern part were asked to reduce their operating rates and we are running our plant at 60% as well. We think, after the Communist Party Congress, inspections will continue in the long term. These environmental inspections affect not only the upstream market but also the downstream market.”

A source from an acetylene based PVC producer opined, “Environmental inspections are limiting the operating rates for both upstream and downstream markets. We think the congress will strengthen environmental inspections in the long term.”

Apart from environmental decisions, the policies after the congress are also expected to have influence on the Dalian Commodity Exchange, which is an important determinant of the local markets in China.

A PP, PE, trader commented, “The futures market is speculative nowadays and the decisions taken after the 19th National Congress of the ruling Communist Party of China will make it more volatile. For this reason, we think PP and PE prices are more likely to see fluctuations in this period.”

A PVC trader noted, “We think the route of the futures market will depend on the policy to be determined by the 19th National Congress of the Communist Party of China.”