China’s plastic scrap import permits continue to lag

China’s plastic scrap import permits continue to lag

Mid-March permits still leave China on pace for a 97 percent decline in plastic scrap imports.

April 6, 2018

Dr. Steve Wong, the executive president of the China Scrap Plastic Association (CSPA), says an eighth list of 2018 import permits released by China’s Ministry of the Environment (MEP) in mid-March continues to place the nation’s plastic scrap import levels far behind its volumes in prior years.

The mid-March permits had a combined import volume of 18,200 tons to be received by 14 plastic recycling facilities, which Wong calls “the largest in terms of quantity so far” in 2018.

The 2018 year-to-date total of 44,760 tons for 43 recycling plants puts the nation on track for an “annualized total that can potentially be up to 215,000 tons, which would be a drastic shortfall of 7.1 million tons against the 2016 yearly imports of 7.3 million tons,” states Wong, referring to what would be a 97 percent volume reduction.

Wong, who also is chairman of Hong Kong-based Fukutomi Co. Ltd. and a member of two Bureau of International Recycling (BIR) committees, adds that even the assumption of 215,000 tons imported in 2018 “could be too optimistic, as a policy to enforce reduction has been adopted.”

He also writes in his market report to CSPA members that the recycled pellet market “is hard hit recently by the latest round of enforcement.” The MEP’s “three-unification” effort is described by Wong as “an existing requirement introduced in 2014 on plastic raw material imports with required specification standards of unified color, unified size and shape, and unified packing on the same shipment of plastic materials imported as production feedstock.”

Continues Wong, “Reportedly triggered by smuggled imports of plastic [scrap] uncovered during various customs checks, China Customs has adopted new measures of enforcing 50 percent or more random checks on all recycled pellet imports recently at ports in Fujian, Tianjin, Shanghai, Ningbo, Qingdao, Dalian and Guangdong.”

The inspections have “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. Goods found to be out of compliance with the ‘Three-unification’ requirement, such as mixed color [pellets] were repatriated or to be considered as ‘solid waste,’ [with a burden of] proof that the imported goods will be used directly as feedstock.”

Wong says CSPA is “working actively on this issue and has made suggestions to the players in the industry that, apart from complying with ‘three-unification’ requirements, [the] goods producer must submit a mechanical property test table” that meets standards set by China Customs.

Shippers in Southeast Asia are working to comply with the requirement by shipping pellets of unified color (either black or natural clear) to avoid problems, adds Wong.

The recycled pellets market overall has been affected by the slowdown in the trade cycle caused by the new inspection measures, which has led to tight cash flows, according to Wong. The Three-unification process “also impacts normal recycling operations, as recycled-content pellets with additives or compounding substances cannot pass customs checks,” he adds.

The import issues in China will be the focus of programming at the RePlas 2018 event, organized by the CSPA and taking place in Shanghai April 20-22.