Plastics sector warned of over-reliance on China

If the Chinese plastics market sneezes, we get a cold; if the Chinese get a cold, we develop fever; if the Chinese get a fever, then we develop pneumonia

 
Surendra Borad, chair of the BIR plastics committee

Speaking at the Bureau of International Recycling's (BIR) Spring Convention in Istanbul last week (June 2), Surendra Borad, chair of the BIR's plastics committee, characterised the over-dependence as putting European traders in a vulnerable position.

He said: “If the Chinese plastics market sneezes, we get a cold; if the Chinese get a cold, we develop fever; if the Chinese get a fever, then we develop pneumonia.”

Mr Borad stressed that the increased exports from Europe to markets in the Far East had become a “serious issue” and called for a relaxing of restrictions preventing traders from being able to use other outlets, such as India and Indonesia.

The comments come shortly after Chris Dow, managing director London-based Closed Loop Recycling, claimed that the increased trade with China was at the detriment to the “infant” domestic plastics recycling infrastructure (see letsrecycle.com story).

Mr Borad, who was re-elected to serve a further term as the committee's chairman, told delegates that the EU exported 3.3 million tonnes of plastics scrap in 2009, of which 90% went to China and Hong Kong. And, during the first three months of 2010, he said China had imported 1.8 million tonnes.

However, Mr Borad did state that other potential export outlets – such as India – were themselves standing in the way of becoming a serious option for EU exporters. He said: “The reason for the restriction is the mindset of the Indian officers and ministries. India considers scrap as waste whereas China considers scrap as raw materials.”

At present, Mr Borad said only 30 or so companies in India are capable of accepting non-PET plastic scrap, although he said the country had a good demand for PET and consistent need for clean LDPE.

Export

The BIR's warning over the over-dependence on China comes at a time when plastics reprocessors are reporting a decline in the prices being on the export market for recovered plastic and cardboard (see letsrecycle.com story).

However, despite industry sources stating the opposite in the UK, Jacques Musa of Veolia Proprete France Recycling told the BIR delegates that there were “no significant price fluctuations anticipated for scrap exports to China in June”. This prediction of stability was echoed by delegates from Germany, Belgium and the Netherlands.

Mr Musa did state that the French market was currently experiencing a shortage of available secondary raw material, with recovered PET supplies “proving to be insufficient to meet demand”.