China is upending the global plastics market. The world’s biggest user of scrap has stopped accepting shiploads of other countries’ plastic trash as it phases in a new ban.
PLASTIC CONSUMPTION
The country accounted for 51% of the world’s plastic scrap imports last year, with the biggest contribution coming from the US, according to the Institute of Scrap Recycling Industries, an international trade group.
2. The China ban could shift about 2% of global polyethylene plastics supply from recycled to new material.The country has already halved its purchases of scrap polyethylene from a 2014 peak, he said.
IMPACT - UNITED STATES
1. About 30% of North America’s recyclables were historically processed in China, according to Morgan Stanley’s Andrews. China is creating a void in the market for used plastic that will have a “devastating impact” on recycling worldwide, according to the recycling trade group.
2. Some recycling programs are beginning to come under stress because China has stopped issuing licenses to import scrap plastics ahead of the January 1 ban. Global prices for the waste have already dropped 10%. For producers, however, China’s ban on importing scrap will boost demand for new plastics by enough to nearly absorb all the new polyethylene output coming online next year in the US.
3. The effects can already be seen in China’s increased appetite for virgin polyethylene, with imports up 19% this year as scrap polyethylene imports dropped 11%, he said. US exports of polyethylene plastic to Asia will reach about 5mn tonnes by 2020, a five-fold increase from last year, with most of it headed to the Chinese market.
4. All the new US output had been expected to push plastic prices into a slump until demand catches up. That still may happen, but much less than previously thought as the China scrap ban, Hurricane Harvey disruptions and delays in US plant construction are keeping the market more in balance.
IMPACT - UNITED KINGDOM
1. Some nations recycle plastics domestically, meaning that they have the capabilities to take in, sort, treat and remold plastics within their own borders. However, many nations, including the UK, have taken to outsourcing their plastics recycling — usually to China.
2. The UK could negotiate with other manufacturing nations, like Malaysia, to determine if those countries would accept some of its waste.But even if that proved effective, the UK will likely still have a significant backlog of plastics waste.
3. The UK could also use landfill sites, but they have drawbacks. Plastics were once thought to be inert, but some research shows that over time they can leach chemicals and contaminate groundwater.
4. Another potential solution is incineration. But this strategy is terrible for the environment, and to recoup investment in building incinerators, they would have to run for several years — if not decades.
5. A report by Parliament’s Environmental Audit Committee (EAC), released 5th January calls for a levy similar to the plastic bag charge to try and curb the UK’s addiction to single-use, hard to recycle coffee cups.
6. The partnership between Hubbub and Starbucks will see a five pence charge introduced in 20 to 25 central London stores from February in order to investigate the impact on customer behaviour. Reusable cups will be promoted alongside the charge, the revenue from which will go towards a ‘comprehensive behaviour change study’ run by Hubbub.
IMPACT - CANADA
1. Nova Scotia government is considering ideas to deal with low-density film plastics, including the possibility of establishing a local recycling facility, implementing a consumer fee to support industry recycling elsewhere, or banning the material altogether.
2. Municipalities across the province have had to stockpile film plastics — such as grocery bags and the kind of plastic wrapping found around water bottles and toilet paper — since July, when China stopped taking the material for recycling.
3. Municipalities will continue to collect and sort recyclables, but they will have to store film plastics until a long-term solution is found. Some of the excess material has already been sent out of province for burial, and a large portion is also being sent away to be burned.
4. Colchester County has already amassed 13 containers of plastic bags and is proposing to build a gasification plant that could turn some plastics into fuel.
NEW OPPORTUNITIES - UNITED STATES
1. China has begun buying brand new plastic to replace all the recycled scrap – and that’s great news for US chemical makers such as DowDuPont, which are scrambling to find markets for millions of tonnes of new production amid an industry investment binge. US exports of one common plastic are expected to quintuple by 2020.
2. The US has become the cheapest place in the world to make plastic, thanks to a fracking boom that’s created a glut of natural gas, the main feedstock for manufacturing. Taking advantage of low gas prices, chemical producers have invested an unprecedented $185bn to build new capacity in the US, according to the American Chemistry Council, an industry group.
3. Exporting high-value resins to China instead of cheap scrap could help chip away at the US’s $250bn trade deficit with the nation.
NEW OPPORTUNITIES - ASIA
1. Batam Free Trade Zone Authority (BP Batam) has granted its first investment permit in 2018 to Chinese plastic maker Hong Sheng Plastic Industry, which is set to invest US$4 million in Batam, Riau Islands.
2. the company relocated its factory from Vietnam to Batam because of labor issues. Batam was chosen because of its proximity to Singapore, which would ease shipments
3. The manufacturing facility to be set up in Batam will be able to produce 50,000 tons of plastic pellets annually. It will employ 190 workers, 150 of which will be Indonesians, while the rest will be Chinese.
NEW OPPORTUNITIES - SEBIA
1. A Memorandum of Understanding has been signed in the Serbian town of Cuprija with the Chinese company Blue Sky with four plastic processing plants and employ 500 workers.
2. The total, estimated value of the first phase of the investment is 12 million euros.
Source: care2, gulf-times, b92, thejakartapost, heroldnews,
