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China's import controls affecting price of plastic

Industry experts are predicting the price of plastics may fall this month due to varying issues including Chinas import controls.

Over the past month the duty on imports into China has increased. Container prices have also risen sharply, roughly doubling charges compared to four months ago.

Additionally, it is felt that more stringent checking of imports into China from Hong Kong is restricting materials entering the country therefore weakening plastic bottle prices.

A UK recycler said: Chinas export orders are down by 25 per cent and its factories are not very active at the moment, so it is still trying to recover from the recession.

China is only willing to take high grade material and plastic reprocessors in China will only buy it at a price which is low enough for them to make a margin. Because they have very low overheads, it is easy for them to stop taking it and just shut down.

According to Chinese law, plastic bottles can only be directly exported to the country if they are sorted and shredded first. Whole plastic bottles can be shipped from the UK to Hong Kong but are prohibited from entering China as whole plastic bottles. Buyers in Hong Kong should cut up the bottles ready for exporting to China however, sometimes whole plastic bottles still find their way in. It seems as port officials step up their checks on containers they may be finding the whole bottles and holding up material.

Another industry insider said : It is a bit of a cyclical pattern. China stopped taking material for a while before Christmas and then the prices jumped up again. The point is if material is being held up, the price will drop a bit although were not experiencing too much of that at the moment. If any material price does decline it is most likely to be mixed bottles.

With the recent fire at a UK plastic recycling plant, this could also mean more material is on the market, which will further push prices a bit lower.

An additional UK recycler said: It is very difficult to get a shipping container because there are such little exports and imports happening. However container prices are likely to come back down once the economy recovers.

It seems like China is also keeping an eye on material quality because one of the common problems in the Far East is the amount of plastic carrier bags. Although they are a perfectly good grade of plastic to recycle, due to typical contamination inside them, such as receipts, they have reduced plastic bag production significantly, affecting the demand for plastic.

Plastic bottles are still being accepted in Hong Kong but they are paying less to UK exporters which is forcing prices down.

However, domestic demand and rising oil prices appear to have pushed up the price of plastic in the short-term.


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