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Proliferation of recycling investments

Global – While China has been introducing its ‘€˜Blue Sky 2018’€™ initiative to help prevent plastic scrap imports by non-authorised entities, grey clouds have continued to gather over the market in Europe. On the plus side, plastic scrap imports into Vietnam, Malaysia and Thailand have grown strongly since China implemented its restrictions.

The European plastics scrap market remained virtually silent in March without any improvement in prices. Suppliers are constantly searching for better prices but there is no support from the market as demand is very low in comparison to availability.

The volumes going to China have still not been completely absorbed by alternative markets. China is continuing to take a clear stand and is not letting plastics scrap land in the country, thus prioritising the environment over business.

The Chinese authorities have launched a new campaign called ‘Blue Sky 2018’ – a joint enforcement effort by environmental and customs officials aimed at maintaining tight control over imports of plastics scrap. Only authorised entities can have plastics scrap brought into the country.

To date, around 26 500 tonnes of plastics scrap licences have been issued – mainly to PET recyclers. Through this ‘Blue Sky 2018’ campaign, the authorities are looking to prevent the smuggling of waste or illegal imports by customers using another company’s licence.

On the one hand, many of the plastics factories in China that had been creating thousands of jobs in plastics recycling have now closed down. On the other, there has been a lot of new investment in South East Asia in terms of plastics recycling, most notably in Vietnam, Malaysia and Thailand.

Meanwhile, there has been a major shortage of plastic granules in the Chinese market. In this way, China’s import business is shifting from scrap to granules.

Imports of plastic scrap into Vietnam, Malaysia and Thailand have been growing month on month since China implemented its ban. They have already accounted for more than 35% of the volume.

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