China’s ban on imported plastic waste has not only boosted demand for virgin material significantly, but also the feedstock paraxylene, purified terephthalate acid and mono ethylene glycol. The imports of scrap plastic peaked in 2016, at around 8 million tons, accounting for almost half of global plastic waste trade.
Polyethylene and polyethylene terephthalate accounted for more than half of the total volume, at around 2.5 million tons, said CITI in its report “Rethinking single-use plastics: Responding to a sea change in consumer behavior”.
Imports started to fall rapidly in H2 2017 and were negligible in 2018 after China announced that it will no longer accept low-grade plastic waste for recycling. This had a positive impact on the primary resins market for both PET and PE due to substitution effects, according to the CITI report. In PET, recycled materials were previously processed into polyester staple fibres – which implied that the plastic waste ban could lead to a rise in demand for virgin polyester.
Import replacements also boosted domestic virgin resins demand significantly, as recycling PE was roughly 8% of the total size in 2016. In 2017, China PE imports dropped 23% year-on-year, but virgin PE imports rose 18%. The substitution trend continued into 2018, with another 1 million tons of additional virgin PE demand expected in 2018. This accounts for 1% of global PE demand, or 4% of China’s demand.
