BEIJING • China is considering restricting traffic carrying some chemicals along the Yangtze River as a security measure ahead of next month's Communist Party Congress, triggering a rally in prices as industrial buyers scramble to secure raw materials.
The Maritime Safety Administration (MSA) last week said it may bring in curbs during the Oct 11-28 period, but had not yet made a formal decision. It said it had issued an internal document, but gave no further details. Traders said the document outlined possible curbs on the loading and unloading of some potentially hazardous or inflammable chemicals at ports along China's longest river.
The MSA referred queries to the Ministry of Transport, which did not respond to a request for comment. Traders said they had been informed of the safety crackdown by their logistics suppliers, who had read the internal document as formal instructions for the congress, which occurs once every five years and will start in Beijing on Oct 18.
The Chinese authorities often crack down on safety ahead of and during the congress in an effort to prevent incidents that might distract attention from the political gathering. Ports that could be affected include the world's biggest liquid chemical port, Zhangjiagang, about 100km from Shanghai, as well as major ports in Jiangyin, Taicang and Changzhou which serve petrochemical companies, said Wood Mackenzie analyst Salmon Lee.
"This has led to... a spike in spot prices for some products as players rush to bring forward loading/unloading dates, or buy more spot material to cover any possible shortfall," Mr Lee said in a note.
The cargo delivery rush may have been exacerbated by the week-long National Day Golden Week holiday starting on Sunday, when shipping is expected to slow down.
This has led to... a spike in spot prices for some products as players rush to bring forward loading/ unloading dates, or buy more spot material to cover any possible shortfall.
MR SALMON LEE, analyst at Wood Mackenzie, on possible curbs on the loading and unloading of some potentially hazardous or inflammable chemicals at ports along China's longest river.
Many buyers have requested suppliers to ship between end-September and early October, rather than later in October, said Mr Lee. Spot prices of monoethylene glycol, used to make polyester and anti-freeze, rose to US$950 (S$1,290) per tonne this week, from US$910 to US$920 a week ago, said Wood Mackenzie, a provider of data and analysis on the energy, metals and mining industries.