FocusGuangzhou to restrict chems transport ahead of Asian Games

31 August 2010 05:28  [Source: ICIS news]

By Mahua Chakravarty and Dolly Wu

SINGAPORE (ICIS)--Restrictions on transportation of dangerous chemicals will be imposed in Guangzhou, China from 20 October as the city will play host to the 2010 Asian Games in November.

Chemicals like toluene, mixed xylenes, toluene di-isocyanate (TDI), caustic soda and chlorine would be subjected to transportation checks, with storage volumes of some to be limited until the end of December, industry sources said on Tuesday.

The Asian Games will be held at various venues within Guangzhou in China’s southern Guangdong province from 12-17 November.

“From 20 October to 31 December, dangerous chemical plants within 1,000 metres to the Asian Games venues have to submit the production and storage application to the government,” said Wang Hongyu, an official from the Guangzhou Production Safety Administration.

“The production capacity of these plants will be cut by 30% to 70%, while the storage volumes have to be lowered by 50% of their daily volumes,” Wang said.

The plants would have to secure approval from the Guangzhou government by the end of September or they would have to stop production and be prohibited to store dangerous chemicals, said Wang.

Transportation restrictions would be implemented on a trial basis from 1 September, according to some market sources, but the city government of Guangzhou has yet to announce when these will formally take effect.

“We have not filed any papers for the restriction, [as] we need [to] do many test works, so the actual time for the announcement [has not been decided yet],” an official from the Guangzhou Traffic Bureau told ICIS news.

China habitually imposes restrictions on transportation of dangerous chemicals whenever one of cities would host major events such as the 2008 Olympic Games in Beijing and the six-month long World Expo 2010 in Shanghai.

Some markets players in the TDI market said they expect regulations in Guangzhou ahead of the sporting event to be stricter than the ones currently in place in Shanghai.

Demand for toluene might take a hit from Guangzhou’s restrictions in the fourth quarter, said a China-based toluene trader.

But other market players downplayed the potential impact of the restrictions on China’s overall demand-supply balance.

Downstream consumers of inorganic chemicals such as caustic soda and chlorine that are based in Guangzhou may be short of the material when the restrictions are imposed, industry sources said.

Most industry players said they were expecting the authorities to implement forced reduction in operating rates at chemical plants for the whole of the fourth quarter because of the Asian Games.

With additional reporting by Judith Wang and Aaron Cheong

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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By: Mahua Chakravarty
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