Domestic processing firms moving abroad
China's ban on imports of plastic waste is reportedly causing a build-up of rubbish at recycling plants in the UK and will bring "chaos" for the UK government in the weeks ahead, the Guardian reported Wednesday.
The impact will not be restricted to the UK, as other countries including the U.S., Canada and France are also major exporters of plastic waste to China, industry analysts said.
Chinese firms that depend on imported plastic waste for production have also been affected by the restriction and many of them have resorted to transferring their plants to overseas markets in Southeast Asian countries, according to analysts.
In July 2017, the State Council, China's cabinet, said that "foreign garbage" will be entirely banned from entering the country as part of stricter management of solid waste imports. The plastic ban took effect on Monday. The ban will have a big impact on U.S. plastic waste exporters, said Zheng Tianlu, an expert with the China Plastics Processing Industry Association.
Zheng told the Global Times on Wednesday that China's imports of plastic bottles for milk from the U.S. used to cost around 0 to 0 per ton, but the price fell to around 0 per ton in late December as plastic waste is also piling up in the U.S.
China began to import solid waste as raw materials to make up for the shortage of resources in the 1980s.
"China imported more than 7 million tons of plastic waste in 2017 and the imports are likely to drop to 10 percent of that amount in 2018 due to the ban," Wang Wang, secretary general of the China Scrap Plastics Association, told the Global Times on Wednesday.
The restriction will affect Chinese companies that use imported plastic waste as a raw material for production and the number of affected firms will be at least 1,000, Wang noted.
These companies will either transfer their plants to overseas markets or will have to close, Wang said, adding that many of them have already moved operations to foreign markets, mainly in Southeast Asian countries.
"I visited four plastic waste recycling plants in Thailand the other day and found all of them had been set up by Chinese firms," Zheng said.
The ban also affects small Chinese firms by squeezing their profits, Zheng said, adding that "therefore, small companies will raise the prices of their plastic products."
Plastic waste imports cost around 3,000 yuan (1) per ton, and after processing and a 15 percent depreciation rate as well as duties, the products would cost about 5,500 yuan per ton but are sold at more than 8,000 yuan per ton in China, according to Zheng.