CRRA Hangzhou: Tough Fence to Clear

A slower growth economy and Operation Green Fence have combined to make the plastic scrap sector in China a difficult one in 2013.

Speaking to attendees of the 2013 China National Resources Recycling Association (CRRA) International Recycling Conference & Exhibition in early September, Zhang Xiujuan of Sublime China Information Co. Ltd. (SCI), said the market for plastic recyclers in China this year has witnessed “large volume reductions” and is “not getting stronger.”

Zhang estimated that many processors of imported plastic scrap are working at “50 to 60 percent operating rates” and “some are below 30 percent” of their operating capacity. She added that “margins and revenue are low and profit is reduced.”

Operation Green Fence and other “supply-side regulations” have both lowered volumes and increased operating costs, said Zhang. “Compared to 2012, shipments are reduced in both number and the size of the purchase orders,” she added. One exception was the month of July, when import volumes enjoyed a “huge increase” after the slow period from February to June, said Zhang.

Zhang told attendees that the third quarter of the year is typically the peak season for rigid plastic scrap imports but early indicators are that demand is “far from rolling.”

Domestic plastic scrap collection in China, on the other hand, is “increasing rapidly,” said Zhang. She predicted that, with the support of national policymakers, domestic plastic scrap recovery “will meet 70 percent” in the future in China.

Zhang portrayed China’s plastic scrap processing sector as fragmented, with 90 percent of the processing volume conducted by small and medium enterprises. She urged such enterprises to combine to create economies of scale. “We have to strengthen our brand and image,” Zhang said of the plastic recycling sector in China.

The CRRA 2013 China International Recycling Conference & Exhibition was Sept. 3-5 at the San Li New Century Grand Hotel in Hangzhou, China.