Growing demand for recyclable materials was the key trend found from MRW’s research into the Chinese market. In phone interviews conducted by MRW with a sample of materials buyers based in China, many explained that the demand for their materials was growing. One plastics importer even described the market as “booming”.
Several of the plastics recyclers contacted felt that the outlook ahead for their sector was positive, with stable demand for hard plastics, PET and HDPE. Companies noted that they had experienced more activity since the beginning of March, and this was being interpreted as a sign of more positive times ahead and a healthier 2010 as compared to 2009.
Some buyers had noted that their customers were starting to expand their businesses, which resulted in greater demand for the materials they were supplying. Asked about the price of materials, the Chinese buyers explained that their prices were directly linked to demand for their materials, so fluctuated accordingly.
One Chinese plastics recycler based in Tianjin told MRW that in his experience domestic plastic prices change in line with international oil prices – as is the general experience in the UK. However, he pointed out that although international oil prices have fallen, waste plastics from abroad have not changed in price, and have even risen.
Buyers of plastic report that the price of imported waste material is fairly high and that import prices are affected by the costs involved with customs and shipping, as well as the quality of the material. One plastics buyer put the premium paid for imported materials at a level that was 20% higher than domestically sourced material. That said, buyers explained that materials sourced from abroad were seen as being superior to domestic materials, so this demand was expected to continue.
Buyers explained that demand for materials in China varied according to the seasons. For example, in the spring there is generally greater demand for plastic film due to the demand for this material in the form of agricultural film from farmers. Similarly, in the summer, the season when new construction projects are most likely to start, there is generally greater demand for the hard plastics used to make piping and tubing, for use in building projects.
Many buyers felt that the demand was “always there” and with local industry growing, this was likely to be the case moving forward.
Causes for concern
Despite this appetite for materials, Chinese buyers point out that with importing material from abroad, customs issues are a concern. One buyer explained that it can be difficult to estimate how long it will take for material to come through Customs and that material could take one week or one month to get through the Customs system, adding “nobody knows” how long it will take.
The customs fee, paid to import materials into China, is also going to go up. From 1 April 2010 Chinese Customs has imposed new rules that require all importers of waste plastics, paper and metals to fully declare what they are importing.
This has been introduced to crack down on importers falsely claiming to be bringing in lesser grades of materials in order to pay less tax. For example, if a container had 98% copper content, importers have been claiming it is only 96%, so saving themselves a significant amount in taxes. But stricter examination of incoming materials will mean an even lobger time for the materials to clear customs.
Where materials are sourced from
Plastics: Hong Kong, US, Spain, France, Italy, UK, Japan, Korea
Paper: Germany, Spain, UK