G20 Summit: Will China PP supply be affected?

Market players reported that Chinese authorities are planning to shut factories and road ban on heavy vehicles around Hangzhou area to reduce air pollution in preparation to welcome world leaders for G20 Summit on 4-5 September 2016. Similar to last year, the “air cleaning” activities shall take 12 days, starting 26 August to 6 September 2016, sources added.

Market participants are expecting at least six PP plants around Hangzhou area to be shut during the summit, which are listed in the following table. As a result, a major question now is would PP supply tighten?

The estimated capacity loss was made solely based on hypothetical that all plants will be shut fully during the 12 days, however, CommoPlast have contacted some of the aforementioned companies and there is no official guideline from municipal government on the required operation rate yet.  

Players at the moment are divided about the possible impact on the PP supply during the summit with some are seeing minimal effect given expected stagnant demand with start up of new plants in other areas. Meanwhile, more conservative players prefer to wait for official guideline from the government on the operation rate before judging the impact.