The world's largest consumer of scrap metal has stopped accepting plastic waste in other countries and has issued a new ban that is bad news for the recycling industry because China has been a major consumer of recycled materials that processes 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 the company 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.
'Now is a good time to introduce 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.
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 has been reduced by half of the waste polyethylene.
The United States is the only country that can fill this vacancy promptly.
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.
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'.
Some recovery programs are under pressure as China has stopped issuing permits to import waste plastics before the ban of January 1. Aloke Lohia, chairman of Thailand's Indorama Ventures, said global waste prices have dropped 10% and the company has operations in Europe, Mexico and Thailand bought plastic bottles for their processing plants.
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.
It is expected that all new output in the United States will push plastic prices down until the demand is rising, but this may still be more balanced than previously thought of as a ban on Chinese scrap products, as a result of Hurricane Harvey, disruption and delays in the construction of the U.S. factories.