Plastics scrap imports plummet as China tightens regulatory grip

Asia – China’s plastics scrap imports could struggle to extend very far beyond 200 000 tons this year – a vanishingly small volume compared to the 7.3 million tons sourced from overseas in 2016, according to Dr Steve Wong of Fukutomi Company Limited, the executive president of the China Scrap Plastics Association (CSPA).

In the year to mid-March, 43 recycling plants were allocated import permits for a total of 44 758 tons. If approved volumes remain at the same level for the rest of 2018, this would mean Chinese imports for the year of around 215 000 tons. But even this calculation ‘could be too optimistic’, he adds, ‘as a policy to enforce reduction has been adopted’.

Wong, who is a member of the BIR world recycling organisation’s plastics and e-scrap committees, also notes that the recycled pellet market in China has been ‘hard hit’ by enforcement of a 2014 ‘unification’ requirement covering the colour, size and shape of plastic raw material imports, as well as unified packaging of the same shipment of plastic materials imported as production feedstock. ‘Many factories in South East Asia are working to comply with the requirement by shipping goods in a unified colour of either black or natural clear,’ he observes.

Furthermore, Chinese customs has adopted new measures to enforce ‘50% or more’ random checks on all recycled pellets arriving at the ports of Fujian, Tianjin, Shanghai, Ningbo, Tsingtao, Dalian and Guangdong. ‘This has caused numerous issues as customs is taking upwards of one month to complete these checks; thus, thousands of containers are now stuck at these ports,’ Wong reports.

These measures are designed, he adds, as a guard against ‘the loophole of recycled pellet imports which do not grant the controlling authority the right to track the use of plastic materials imported directly as production feedstock’. In seeking a solution to this issue, the CSPA has suggested to industry players that, in addition to complying with the unification requirement, description of goods with technical specifications could be used if needed.

The new customs checks have led to a slowdown and thus tighter cash-flow in the recycled pellets market. Furthermore, pellets with additives or compounding substances are not passing the checks.