Who is the next Longsheng in Zhejiang Province after the Xiangshui Incident?

On April 4, 2019, the Standing Committee of the Municipal Committee of Yancheng City, Jiangsu Province, decided to completely close the Xiangshui Chemical Industry Park. It is known that there are four chemical parks in Yancheng, namely, Xiangshui Eco-chemical Park, Jiangsu Coastal Economic Development Zone Coastal Industrial Park, Dafenggang Petrochemical New Materials Industrial Park and Funing High-tech Industrial Park. From the number of enterprises and registered capital in the park, Xiangshui Chemical Park ranks second among the four parks. More importantly, Xiangshui Chemical Industrial Park is the business location of several listed companies in Lianhua Science and Technology, Anoqi, Jiangsu Wuzhong. Lianhua Science and Technology and Wuzhong Jiangsu are expected to have a greater impact on their performance due to their high production capacity and sales share.

In addition, on April 1, the General Office of Jiangsu Provincial Government issued the "Jiangsu Province Chemical Industry Regulation and Promotion Program" (hereinafter referred to as the "Program"). The Plan clearly states that by the end of 2020, the number of chemical production enterprises in the whole province will be reduced to 2000; by 2022, the number of chemical production enterprises in the whole province will not exceed 1000. The plan also requires that all efforts be made to promote the renovation and upgrading of chemical industry parks, and a comprehensive evaluation of 50 chemical industry parks in Jiangsu Province is carried out. According to the evaluation results, the pressure is reduced to about 20. It is worth noting that besides Jiangsu, the coastal provinces of Shandong, Zhejiang, Fujian and Guangdong also carried out intensive safety renovation actions in the chemical industry after the "March 21" accident.

Industry insiders said that the Plan will have a great impact on the chemical industry in Jiangsu and even the whole country. Guojin Securities Research and Report pointed out that, on the whole, pesticides, dyes, Acrylic Acid, Epoxy Resin, EC and other products in Jiangsu Province accounted for a higher proportion of the national capacity, especially chlorpyrifos, chlorothalonil, CCMP. It can be predicted that with the opening of environmental protection renovation in Jiangsu Province, the supply of fine chemicals and chemical intermediates based on the above products will be greatly affected in the short term. In this process, leading chemical enterprises with higher integration level are expected to benefit in the long run.