Chinese demand for British recycled plastics less bouncy but still buoyant
Demand for recycled plastics in China is expected to grow at an annual 8·7 per cent to reach 29 million tonnes in 2015 – 65 per cent more than in 2009, according to market intelligence company CBI China.
While the country will still need an increasing supply of imported recycled plastics, its demand for imports will grow at a slower rate than its overall demand (reaching around 10·5 million tonnes) as domestic recycled materials increase to 18 million tonnes, or 64 per cent of Chinese demand for recovered plastics, by 2015.
In historical terms demand for recovered plastics is estimated to have grown from 4 million tonnes to 15 million tonnes between 2000 and 2007, or around 21 per cent per annum on average, while demand grew at a more modest 8 per cent per annum on average between 2007 and 2009, to just over 17·5 million tonnes. Preliminary estimates place Chinese demand for recovered plastics in 2010 at 19 million tonnes.
This growth forecast is presented in the latest report from government recycling body WRAP (Waste & Resources Action Programme) on The Chinese markets for recovered paper and plastics – an update which concludes that Chinese demand will be significantly lower than forecast in its last report, which was published in 2009 following a period of market disruption in late 2008.
The report highlights China’s position as the single largest destination for UK exports of recovered plastics and paper. China’s share of UK exports of recovered plastics grew from 60 per cent in 2000 to 88 per cent in 2010. Overall Britain was the fourth largest supplier of recovered plastics to China at 9 per cent of the country’s need (Germany 15 per cent; Japan 19 per cent and the USA 24 per cent).
The importance of the Chinese market has applied pressure to prices in Britain, returning prices to around – and in the case of clear PET bottles, substantially above – the pre-autumn 2008 downturn level.
For the first time WRAP’s report analyses the end markets for recovered plastics in China. With the caveat that lack of official statistics and the fragmented nature of the sector complicate any analysis of the Chinese plastics reprocessing industry, WRAP concludes that three market sectors – packaging, construction and appliances – account for three quarters of total demand. The packaging sector takes more than 40 per cent of recovered plastics in China, mainly for use in the production of bottles and bags, while construction accounts for an estimated 20 per cent of demand, mostly to make pipes and boards, and the electrical appliances sector is the third largest user, accounting for an estimated 14 per cent of demand. Television shells, audio shells and computer peripherals (such as keyboards and mice) – all of which use recovered ABS and PS – are some of the key end-applications and other uses include parts of fridges as well as the inner, non-visible components of some small appliances. The recycled content varies significantly, with items destined for the Chinese domestic market (or nearby Asian markets) typically having a higher recycled content than those destined for European/American markets.
UK customs data show that recovered plastics exported from the UK to China primarily comprise polyethylene (63 per cent) and “other plastics” (28 per cent). Other polymers separately identified include PS (7 per cent), PP (2 per cent), and PVC (1 per cent). Based on this, says the report, “the end applications for UK recovered plastics in China can vary significantly.” However, the data and market feedback suggest that the main end uses are likely to include packaging (bottles, bags), pipes for the construction sector, and greenhouse and mulch films for agriculture.
The report concludes: “The available evidence suggests that there is strong Chinese demand for the full range of polymers exported from the UK. The sector analysis shows that there is a wide array of end-uses for recovered plastics in China, the vast majority of which are displacing the use of virgin polymer. It also appears that the main uses of recovered plastics are for the Chinese domestic market, linking future demand to growth in China.”
Source : www.britishplastics.co.uk