Olympic chemical restrictions worries industry

By Hepeng Jia/Beijing, China

The Chinese government’s drive to restrict the movement and manufacture of chemicals ahead of the Beijing Olympics could hit the country’s chemical industry, analysts have warned.

The production and transport of potentially dangerous chemicals around Beijing and nearby cities have been restricted since May. The major chemical producing provinces in southeastern and southern China have also begun monitoring chemical firms to ensure that they are not supplying toxic or dangerous chemicals to unauthorised buyers in Beijing or other cities hosting Olympic events.

Only authorised firms or research institutions can produce, transport, sell or buy any of 257 chemicals on a list issued by Chinese authorities. The list includes common reagents like acetic acid, ethanol and sodium sulfide. 

Gao Guang, deputy director for logistics at ENN Chemicals in Langfang, near Beijing, says many of the chemicals on the list are important feedstocks for the industry and the restrictions could make them more expensive.

’To make things worse, the restrictions have come as prices for most chemicals are already soaring,’ Gao says.

But Ye Yingmin, managing director of Beijing-based consulting firm Chem1, thinks the impact of the restrictions will be small. ’Beijing is not a major hub for the chemical industry in China, and the only major chemical plants located here are those belonging to Yanshan PetroChemical [a subsidiary of Sinopec]. However, in the push to cut pollution before the Olympics, most of Yanshan’s plants have already been closed,’ Ye says.

He adds that though the demand for chemicals in Beijing could drop as a result of the restrictions, the impact on the overall demand for the whole of China’s chemical sector is likely to be negligible. ’The only uncertainty is how much the transport restrictions will affect other regions. If the transport of chemicals via Beijing’s suburban roads to outlying districts is also curbed, then that could be a cause for concern,’ Ye told Chemistry World.

Ye says that it’s vital that the chemical industry is well prepared and, for instance, has arrangements in place for the manufacture of intermediate products and equipment upgrades during the restriction period.

Meanwhile, research institutes and universities have not been seriously affected by the rules, as the chief chemicals supplier to academic labs, Beijing Chemical Agents Co, is one of the approved firms.