Carbide-based polyvinyl chloride (PVC) producers in Shandong province of east China have cut operation rates, and some of them have even shut down their units on poor margins amid economic crisis, said local producers on Tuesday. Major carbide-based PVC producers Dezhou Petrochemical, Shandong Haihua Chemical and Qingdao Haijing are now operating at 20-30% rates at their respective units with capacities of 70,000 tonne/year, 200,000 tonne/year and 160,000 tonne/year, while Xinfa Huayu is running at 50% at its 200,000 tonne/year plant, said company sources. In additional, Dezhou PC, Haihua and Qingdao Haijing are planning to shut down during November, hence leaving only Qilu Petrochemical and Xinfa Huayu to keep working at that time. Shandong province served as one of the biggest production bases for PVC in China, being home to 14 PVC producers with a total capacity of 2.15m tonnes/year. The PVC market has seen huge price plunges since the second half of July when carbide-based PVC was at yuan CNY8,900-9,000/tonne ($1,299-1,314/tonne) EWXH all regions in China. It is currently traded at CNY5,800-5,900/tonne EWXH, down more than 50%. In October, demand from downstream sectors remained weak and many downstream convertors shut down their plants or maintained low operation rates due to credit crunch and a lack of orders. China Import and Export Fair (Canton Fair) in the second half of October did not promote PE resin deals as expected. Moreover, Sanlu Milk Powder incident stroke the plastic packaging industry, damped PE demand further. In November, some soft packaging producers recovered from the Sanlu poisonous milk scandal, and Tetra Pak has resumed some production lines. In addition, China rose its export tax rebate for plastic products from 5% to 9%, stimulating the demand for PE imports. China producers planned to cut production. Some market players intended to stock inventories as they believed that the prices may touch the bottom in November. General Administration of Quality Supervision announced that quality inspection must be carried out for all food products on September, and many plastic packaging materials with typeface of products exempt from quality inspection are useless since 1 January, 2009. Thus, the demand for plastic packaging materials will increase obviously in end 2008 and early 2009. However, total demand will still remain weak on the world economic downturns. Demand recovery from downstream converters would spend several months instead of a short term on the global economic downturn, many traders stated. Major traders are cautious in operation as their confidence will not recover in the short term.