Certain grades of plastic are no longer being accepted into China as the National Sword campaign continues to bear down on imports, prompting flows of material into other markets such as India.
Due to more thorough quality checks at Chinese ports, material that is still being dispatched risks being held up, leading to a backlog. In April, 5,000 containers of stranded plastic scrap that could not enter the country was to be put up for auction, according to the China Scrap Plastics Association (CSPA).
Damien van Leuven, director of plastic business Vanden Recycling, whose UK HQ is in Lisburn, Northern Ireland, predicts that more types of plastic will be blocked by China within a few months, with an outright ban on certain grades expected eventually.
He said: “You can still move some limited amounts of that product at the moment but, within six months best case and probably three months, there will be zero possibility to move anything that’s not clean post-industrial or washed.”
He added that other grades were already “dead” into China, such as bottles, which now go to alternative markets, and carrier bags, which could be “impossible” to move in three to six months. This could lead to sellers seeking other markets.
MRW understands from other merchants in the sector that export volumes are down heavily and that demand in general is quiet, especially for film. In some cases film is not being let in at all – even those who could guarantee quality were not prepared to risk their licence.
Sources in the industry expect there to be a stark difference in volumes moved at the end of the quarter once figures are released by the National Packaging Waste Database.
Volumes of some grades have fallen greatly but are still being shifted, while 95:5 and 90:10 film is reportedly hardly moving “whatsoever”, with trading conditions described as “very, very slow”.
Since the National Sword campaign was announced in March, coloured PET and mixed polymer bottles prices have fallen by around £10 per tonne, with further softening expected, while 98:2 film prices have fallen by £30 per tonne along with volumes dropping, due to buying interest and difficulty in shipping due to extreme container rates.
Leuven suggested the ”days of being able to ship a substandard product and get paid for it” were over.
With the flow of material moving elsewhere, other markets could potentially be flooded, reducing the appeal of lower grade specifications which previously would have been traded. High-quality scrap that previously went to China is displacing sales of lower quality 60:40 film.
But Leuven believes the market changes are a positive move for the industry rather than negative. He said good quality material provides versatility in the market, meaning that material could be recycled in the UK, Europe or beyond, and “suddenly you’re not obsessed with China”.
“Good quality is always going to move but, again, it doesn’t always have to move to China – we’re very fixated on China.
“We have had it too easy for a long time and this has been on the cards for years. Anyone who didn’t see this coming hasn’t had their eyes open for the past two years. They’ve only got themselves to blame.”