Import Ban of Waste Plastics to Improve Domestic Plastics Supply and Demand
- time:
- 2019-05-13
Incident: On July 27, the General Office of the State Council issued the "Implementation Plan of Import Management System Reform for Prohibiting Foreign Waste Entry and Promoting Solid Waste Import". The relevant parts of the plastic industry are: before the end of July 2017, the catalogue of import solid waste management will be adjusted; before the end of 2017, the import of living waste plastics, unsorted waste paper, textile waste and vanadium residue will be prohibited.
"Prohibition" has a positive impact on the supply and demand of PET, PE, PP and other industries
According to customs data, in 2016, the domestic import volume of waste plastics was 7.35 million tons, including 2.53 million tons of polyethylene waste, 2.53 million tons of PET waste, 450,000 tons of PVC waste, 90,000 tons of styrene waste and 1.74 million tons of other waste plastics (estimated to be about 900,000 tons of PP waste). According to the apparent consumption of polyethylene, polypropylene and PVC in 2016, we estimated that the imported waste plastics accounted for 11% of domestic apparent consumption of polyethylene, 4% of polypropylene and 3% of PVC respectively. According to the production of polyester deducted from polyester filament in 2016, about 13.5 million tons, the imported waste of PET accounts for about 19% of the production. From the perspective of supply reduction, "ban" will have a positive impact on the supply and demand structure of PET, PE and PP.
The market of regenerated chemical fibers will be greatly impacted. It is expected to increase the start-up rate of raw staple fibers and polyester raw materials.
The volume of imported recycled PET accounts for more than 30% of the domestic recycled PET market. It is assumed that the "ban" affects most of the imported waste PET and has a great impact on the recycled polyester market. The gap is expected to be filled by the original polyester. Recycled polyester is mainly used to produce polyester staple fibers. The ban is expected to increase the start-up rate of domestic new staple fibers and polyester raw materials PTA and MEG industries.
The demand for new polyethylene and polypropylene materials is expected to increase, but it is only a way to replace them.
Imported polyethylene wastes account for 9% to 11% of domestic demand (9% of which is the particulate part not affected by the ban). In the future, this component will be supplemented by three aspects: first, the increase of domestic waste recycling; second, the increase of imports after the waste is processed into particulates; and third, the increase of the supply of new polyethylene. Although the ban will increase the demand for new polyethylene, it is only one way. Imported polypropylene waste accounts for about 4% of domestic demand, compared with polyethylene, imported waste accounts for a smaller proportion.
Uncertainty about the impact of the ban
1) According to the import quota of waste plastics issued this year, it has basically reached the level of import in 2016, and has little impact on supply and demand in 2017 in the short term; 2) In the future, the amount of waste processed into granules will increase, which will cushion the impact of the "ban"; the caliber of waste plastics prohibited from import is the source of life, considering that it is difficult to distinguish between industry and life, the follow-up implementation needs to be observed.
Risk analysis:
Uncertainty in the implementation of the ban; weakening in terms of the global balance of supply and demand.
