REVIEW: The world's largest user of scrap metal has stopped accepting plastic waste in other countries and has issued a new ban, which is bad news for the recycling industry because China has been a major consumer of recycled materials and it processes The resin finally enters the gears of pipes, rugs, bottles and other modern life.
China is overturning the global plastic market.
The world's largest scrap metal user has stopped accepting plastic rubbish from other countries and issued a new ban, which is bad news for the recycling industry because China has been a major consumer of recycled materials, processing resins, The final into the pipes, rugs, bottles and other modern life gear.
China has started buying entirely new plastic to replace all the scrap metal it recycles, which is good news for U.S. chemical companies such as Dow Du Pont because it is busy looking for millions of tons New Products Market. By 2020, the U.S. exports of a common plastic are expected to increase fivefold.
Plastic demand is huge
'Now is a good time to bring in some new assets,' said Mark Lashier, chief executive of Chevron Phillips Chemical, in an interview last month, opening two poly in Old Ocean, Texas Ethylene plant. "If you pull out recycled plastic, market demand will increase. '
China is putting decades of hard work on it and has set up a large-scale waste recycling industry to provide the cheapest plastic products for China's economic growth.According to the International Trade Organization Waste Recycling Industry Association, last year, China accounted for 51% of the world's plastic waste imports, the largest contribution from the United States.
The transformation of supply
Now China is changing its course and told the World Trade Organization in July that China will stop accepting imports of waste plastics and paper by January 1 as China is taking steps to clear up industrial pollution.Morgan Stanley Analyst In a November 30 report, Vincent Andrews said the ban in China could shift about 2% of the world's polyethylene plastics supply from recycled materials to new materials, saying that China has moved away from 2014 Year's peak is cut by half of the waste polyethylene.
Jonas Oxgaard, an analyst with Sanford C. Bernstein & Co., said the United States is the only country that can fill this gap quickly.
This is because the United States has become the cheapest place to make plastic in the world and thanks to the booming fracking, natural gas has become the main raw material for manufacturing.According to the American Chemical Society, an organization that uses low oil prices, The United States has invested an unprecedented 1, 85 billion U.S. dollars in building new production capacity.
Exporting high-value resins to China instead of cheap scrap may help to eliminate the $ 250 billion U.S. trade deficit with China, a goal that has been on the agenda of President Donald Trump.
Two-way flow
Simon Tay, chairman of the think tank Institute of International Affairs in Singapore, said: 'Some of the production patterns we saw 15 years ago started to change quite rapidly, and the two-way flow between the United States and China became even stronger.
According to Morgan Stanley's Andrews, about 30% of North American recycles have historically been processed in China, and according to the Recycling Group, China is creating a void in the scrap plastics market, Recycling has a 'devastating effect'.
Brent Bell, vice president of recycling at Waste Management Inc., North America's largest waste transport company, said the U.S. polyethylene, PET and polypropylene markets have so far remained healthy.
However, Bernstein's Oxgaard said some recovery programs are under pressure as China has stopped issuing permits for the import of waste plastics before the ban of January 1. Thailand's Indorama Ventures chairman Aloke Lohia said global waste prices have been A 10% decrease, the company bought plastic bottles for its processing plants in Europe, Mexico and Thailand.
For example, some recyclers around Portland, Oregon, have limited the types of plastics they accept, said Peter Spendelow, an Oregon Department of Environmental Policy recovery policy analyst. , Trash carriers in rural areas of the United States recently started to transfer some of the plastic to the dump site due to the depletion of the market.
The prospects are gloomy
Although most of the scrap is still looking for homes, Spindlow said: 'Things will definitely get worse.'
Andrews said in a Morgan Stanley report that China's ban on the import of waste products will stimulate the demand for new plastics enough for the producers to get close to all new polyethylene production that will be listed in the United States next year.He said that China is not interested in native low density The growth in demand for polyethylene is already evident, with imports up 19% this year and imports of scrap polyethylene down 11%.
Export soared
J.P. Nah, Asia Polyolefins Analyst at IHS Markit Consulting, said that by 2020 the U.S. exports of polyethylene plastics to Asia will reach about 5 million tons, an increase of 5 times over the previous year and most of them are exported to the Chinese market.
Nick Vafiadis, vice president at IHS Markit, said four new U.S. plastics plants, including Dow's Dow Chemical Division, will have 3.6 million tons of polyethylene plastic by the end of the year and many more are planning this market.
It is still possible that all new output in the United States will push plastic prices down until the demand is up, but this may still be more balanced than previously thought of as a ban on Chinese scrap products, as a result of Hurricane Harvey, disruptions and delays in the construction of the U.S. factories.