Upcoming Asian Games Affect Production at Guangzhou Galvanizing and Die-Casting Producers

SHANGHAI, Oct. 25 (SMM) -- As the Guangzhou Asian Games draw near, production at galvanizing and die-casting producers near Guangzhou city has been curtailed in order to ensure good air quality during the Asian Games and to achieve environmental targets.

According to official Air Quality Security Scheme for the 16th Guangzhou 2010 Asian Games,  the local Guangzhou government will undertake a series of measures to ensure good air quality before the games, in order to company with both the Comprehensive Improvement Plan on Guangzhou Air Pollution 2008-2010 and the Comprehensive Improvement Proposal on Guangzhou Air Pollution Before Asian Games. These measures include restrictions on motor vehicles access, production cuts or suspension at major industrial enterprises, and other unconventional and temporary actions to cut emissions to achieve targets for air quality. 

According to SMM sources at related enterprises in Guangdong province, local governments in Guangzhou and the surrounding regions have strengthened efforts to protect the environment, and these measures are affecting operations at zinc downstream producers in two ways. 

First, transport restrictions. Any trucks with loads greater than 1.5 mt are restricted from main roads, so enterprises must absorb higher costs from detours. Zinc producers in Guangdong province mainly purchase raw materials from other provinces or from the Guangdong Nanchu Repository Management Company, and since zinc prices are currently rising, higher transportation costs will only add more pressure to these enterprises.  However, SMM believes downstream producers are presently showing little interest in purchasing, preferring instead to consume existing inventories as zinc prices rise, so any effect on enterprises from higher transportation costs should be limited.

Second, the polluting enterprises surrounding Guangzhou city have been shut down gradually as the Asian Games approach, with zinc downstream producers affected as well.  According to company sources, notices of production shutdowns have been delivered, but no regulations on production cuts have been set yet. Some polluting enterprises near Asian Games venues have been closed, including galvanizing and die-casting zinc alloy enterprises. Since there are also athletic venues in Foshan and Dongguan cities, industrial enterprises in those two cities will also be shut down as well. SMM sources report there are many die-casting zinc alloy enterprises in Dongguan city and many galvanizing enterprises in Foshan city, so production at zinc downstream producers near Guangzhou city will be affected.

The Asian Games will be held from November 12th to December 15th. According to SMM sources, different departments within the Guangdong government are not unified with regard to the time of production shutdowns, but almost all polluting enterprises will be closed around the Asian Games, with some enterprises expected to remain offline for two months.

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