China Industry Grinds to a Halt to Celebrate Communist Centenary

(Bloomberg) -- China is pausing industrial activity from coal mining and steel making to even some port operations to clear air pollution ahead of the Chinese Communist Party’s 100th anniversary celebration later this week.

Some, such as coal mining, will be closed for as long as a week in the country’s key producing hubs. Others like steel are being put on hold for just one day. Port operations are also being suspended, with trucks delaying loading fuel until Thursday afternoon in some refiners.

The country’s Communist Party is gearing up to celebrate 100 years since its founding, culminating in a speech from President Xi Jinping on Thursday on China’s return to wealth and power. Highly-polluting industrial activity such as steel making and coal mining are often paused during important events to avoid polluted air or accidents that could spark public criticism.

Read: China’s Communists Face Daunting Future as Party Marks 100 Years

Coal has been the biggest target of cleaning up the air around Beijing ahead of the anniversary. In Shanxi, the country’s biggest coal producing province, 128 of the fossil fuel mines accounting for nearly a quarter of the region’s capacity have suspended operations, according to industry website coal.in-en.com.

The industrial action isn’t expected to have any lingering impact on demand or output, although a slowdown in coal production could worsen an already tight market, according to Qi Chunyi, an analyst with Dongxing Futures Co., who forecast prices for the fossil fuel could rise.

“Coal supplies have significantly tightened with anniversary celebrations approaching, a spate of recent accidents and production halts across key producing regions,” said Qi.

With tight supplies, thermal coal futures on the Zhengzhou Commodity Exchange have increased for five straight weeks and added 1.7% higher to 793 yuan a ton on Wednesday.

Steel production, which is also heavily polluting, has been rolled back. Some steel producers in the cities of Tangshan and Handan have lowered output, according to analysts with GF Futures Co., while ports near Beijing including Tangshan, Jingtang and Caofeidian also halted work until Thursday afternoon, coal.in-en.com said.

In Shandong, dozens of independent oil refiners suspended fuel loading onto trucks until Thursday afternoon, according to executives at privately-owned oil refiners in the province. The celebrations may also slow transport networks as some areas ban trucks carrying coal from entering, according to Qi.

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