Government departments concerned in Hebei and other provinces in North China issued scheduling orders to tackle ever-serious smog, requiring all ongoing construction work except those in key areas for people' livelihood and units that haven't produced any products to stop production.
Coal-fueled recycled polyester fiber plants in Jinzhou and Baoding of Hebei all stopped production and will not restart until December 31 after a second announcement from Hebei Environmental Protection Bureau last weekend requiring all coal-fueled plants to cut or stop production. Hebei is home to many coal-fueled recycled polyester fiber plants. The capacity of plants shut down totaled 500,000mt/yr, mainly cotton type re-PSF for polyester spun yarn and wool-type fiber as well as some HC re-PSF and re-PFY.
Shutdown of large plants such as Hebei Jinyi, and Xinji Honglin and some other large plants will surely lead to supply tightness, particularly wool-type fiber and cotton-type PSF. Thus solid re-PSF price may be driven up in the long run with great amount of sources from Yizheng, Jiangyin and other plants in South China flowing in for plants' restock due to rigid demand, though in the short term the price may sustain stable amid downstream plants' sufficient feedstock inventory.
Also, sustained high recycled bottle flake price may be influenced now that the supply tightness is somewhat eased with suppliers seeking new customers in Shandong, Zhejiang, Jiangsu and other places due to large demand slump in Hebei.
In a word, recycled polyester fiber plants in Yizheng and Jiangyin may greatly benefit from the large-scale shutdown in Hebei. Also, for those plants using natural gas or biomass fuel, they may gain great advantage of purchasing recycled bottle flake and selling products.