Provinces including Jiangsu, Shandong, and Guangdong are in crisis, with widespread production halts! Companies have reportedly been shut down for days, leaving high‑priced goods unavailable.

Release Date:

2018-05-22

▶▷▶Shandong, Jiangsu, and Guangdong are cracking down hard on businesses—shutdowns and production curtailments are inevitable. Recently, the prices of chemical raw materials have surged dramatically: POM has risen by 1,906 yuan per ton; TDI has broken through 30,000 yuan; MDI has jumped by 1,500 yuan per ton; and dye prices have climbed as much as 77%. Many observers are exclaiming, “Raw material prices have gone wild!” Why has this wave of price hikes been so ferocious? Beyond environmental and safety inspections, the U.S.-China trade war, heightened tensions in the Middle East, Trump’s abrupt withdrawal from international agreements, and Venezuela’s elections have all stoked the flames driving up chemical prices. As a result, many companies have halted production on a large scale, leading to severe shortages of certain raw materials—even when buyers have the cash, they still can’t secure supplies.

▶▷▶ Shandong, Jiangsu, and Guangdong are cracking down hard on businesses; shutdowns and closures are inevitable.

Recently, the surge in chemical raw-material prices has been nothing short of dramatic: POM has risen by 1,906 yuan per ton; TDI has broken through 30,000 yuan; MDI has jumped by 1,500 yuan per ton; and dye prices have surged by as much as 77%. Many are exclaiming: “Raw materials have gone wild!”

Why has this round of price hikes been so fierce? Beyond environmental and safety inspections, the U.S.-China trade war, heightened tensions in the Middle East, President Trump’s abrupt withdrawal from international agreements, and Venezuela’s elections have all stoked the flames driving up chemical prices.

Many companies have halted production on a large scale, with some raw materials in critically short supply—so severe that even paying for them fails to secure deliveries—and most firms have been forced to stop accepting new orders. “Our factory has been shut down for several days and plans to remain closed for a month”; “The price of 107 adhesive has surged, putting immense pressure on procurement costs; to maintain cash-flow stability, the company recently switched to partial shutdowns, with employees working on rotating leave”; “Raw-material supplies have been disrupted, and workers have been sent on leave”... These reports involve numerous well-known silicone sealant manufacturers across Guangdong, Zhejiang, and Shandong provinces.

▶▷▶In June, more than 2,000 chemical enterprises in Qingdao may face production restrictions or shutdowns, and tight supply could trigger a wave of price hikes.

The Shanghai Cooperation Organization summit is set to take place in Qingdao on June 9–10, 2018. As a major chemical‑producing province, Shandong is home to more than 9,000 chemical enterprises, with large‑scale firms accounting for 37% of the total; Qingdao alone hosts over 2,000 chemical companies.

According to a manufacturer in Shandong, to prevent safety hazards and minimize unnecessary incidents, the company will suspend operations for maintenance from May 20 to June 15. Meanwhile, logistics firms will also be severely affected by service disruptions in certain regions.

In preparation for the Shanghai Cooperation Organization Summit, a major international event, the government is expected to impose stringent air-quality standards on the Qingdao region, potentially leading to measures such as staggered production schedules for factories, temporary production restrictions, or even shutdowns. Consequently, many recycled-plastics companies are likely to suspend operations.

In May, inspection teams from Shandong Province will be deployed to the cities of Zibo, Dongying, Tai’an, and Linyi to conduct on-site inspections. Building on these inspections, Shandong Province will implement a “1+28” safety‑production rectification model.

Jiangsu Launches an Environmental Protection Campaign

Recently, Jiangsu Province has launched its provincial-level environmental inspection, establishing three provincial environmental protection inspection teams that have successively completed their on-site deployments. In Guannan County, Jiangsu, all enterprises within the chemical industrial park have been ordered to suspend production for remediation.

Since Shaxi Town launched a new round of remediation efforts in the chemical industry, 28 chemical enterprises in the area have been targeted for improvement; of these, 22 have been shut down, and 6 have undergone optimization and upgrading.

Meanwhile, in Jiangsu, a major chemical‑producing province, the pace of shutting down, consolidating, and relocating chemical enterprises has been far more aggressive. Public data indicate that by the end of 2018, Jiangsu had closed 2,000 low‑end, outdated facilities, and by 2020, the number of chemical firms had declined substantially, with over 50% of chemical producers having relocated to industrial parks or designated zones.

Our analysis reveals that, among the publicly disclosed planning data for Jiangsu Province in 2018, Wuxi had the highest number of chemical enterprises slated for closure, totaling 255.

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