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How does China's ban on scrap plastics imports reflect on Asian polymers?

  • 08/01/2018 (09:58)
In July 2017, China, the world’s biggest importer of scrap plastics announced its decision to implement a ban on the imports of scrap plastics and it was officially carried into effect as of January 1, 2018. China’s main objective behind this resolution was to protect community health and the environment by cutting down on plastic and other recyclables it receives every year mainly from Europe, Japan and the USA.

Apart from its effect on the global recycling industry, the newly imposed ban has already found an immediate reflection on Asia’s polymer markets. The impact started to be felt in China’s local PE and PP markets this week, since it was already cited as a contributor of the recent gains recorded.

A PP trader commented, “Local prices are firmer this week and we think the uptrend will continue in the near term due to low supplies and the ban on scrap plastic imports, which boosts demand for virgin grades.”

Another trader noted, “PP and LLDPE futures on the Dalian Commodity Exchange gained strength this week with support from the ban on plastic waste imports and limited supplies from the US. Firmer futures and reportedly lower inventories of two major producers are supporting the local market.”

Southeast Asian players were also mostly pleased with the ban decision in neighboring China as they have been receiving an increasing number of offers for recyclable plastics in line with plastics exporters’ search of new destinations.

A regional ABS producer opined, “We think China’s plastic waste ban is good news for ABS producers as China’s absence will bring around a 10% of sales growth.” An Indonesian PS trader said, “China will no longer import scrap plastics and we think this will push buyers to use virgin materials.”

A Vietnamese PET trader commented, “We don’t think PET prices will see any decreases in the near terms as demand will improve, particularly after China’s ban on scrap plastics import.”
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