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Amid China’s crackdown on pollution, some smaller materials companies are closing, tightening supply and boosting materials prices, scenarios which are lifting some CHIM constituents.

“Nine Dragons Paper Holdings Ltd., a containerboard maker and CHIM’s largest holding, has more than doubled this year in Hong Kong trading. The company has benefited as smaller competitors failed China’s environmental inspections and were forced to close, cutting supply and sending prices higher, Morgan Stanley analysts including Rachel Zhang said in a Sept. 27 note,” reports Bloomberg.

The short-term political risks may also be abating. Traders previously worried about President Donald Trump taking a firm stance on trade policy with China may also feel at ease after the U.S. President said that he became quick friends with Chinese President Xi Jinping during their meeting earlier this year.

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