SPECIAL REPORT – PLASTIC

The year 2019 was very challenging for the plastic industry.


Filed under
Plastic Recycling
 
February 20 2020
 
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A few months were very good, where recycling business grew, and a few months were so slow that recyclers struggled a lot for survival. Overall, we saw a turnaround of business that was likely to be shifted from prime plastic to recycled granules. The recycling industry received recognition with very high importance around the world. All petrochemical companies started participating in the recycling industry with a focus on reducing plastic waste and improving the image of plastic.

The year 2020 started with some positive news around the recycling industry. After the holiday period, where there was very little activity, the month of January brought some energy in the market. The prime plastic prices in Asia jumped up by almost USD 50-60 per ton. Petrochemical companies had proposed the increase in prices cited to improving relations between China and the USA, and it was well accepted by buyers. The initial agreement between China and USA to not impose further duties on each other’s goods brought some positive sentiment in the prime plastic market.

On the other hand, shipments of plastic scrap to Asia remain uncertain. The Indonesian Ministry of Environment came up with a new rule for the import of plastic scrap. The new rule, “84/2019,” states that every exporter must be registered with the competent Indonesian authority in their country. This registration is necessary to make any shipment towards Indonesia.

This rule will further restrict the shipment from any country other than the country in which the exporter will be registered. The buyer needs to apply for an import permit based on the exporter’s registration to ensure they can import from that exporter. With this new regulation traceability of imported waste will be easy and in the case of any wrong shipment, the exporter will be bound and liable to take the cargo back. This new rule will be implemented by June 2020.

Import of plastic scrap into Malaysia again drew attention where the ministry of environment continued to maintain strict checking and inspection at the port. Recently Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin told a news conference at Penang Port that so far a total of 150 containers, which were not qualified and had been shipped to customers who did not have proper license and facility, have been shipped back to the country of origin.

The Environment Ministry announced that they were in the process of returning to their country of origin a further 110 containers that were not qualified or shipped illegally to Malaysia. This news once again raised the alarm for the collectors and exporters of plastic scrap to Asian countries.  Many European waste management companies were already preparing themselves to stop exporting the material, and this news from Malaysia will support their decision.

So they will try to find some solution where recycling can be done locally. On the other hand, one cannot neglect the fact that Europe doesn’t have enough facilities to convert or recycle all plastics it is generating today. There must be a balance for the trade of plastics scrap within Europe and outside Europe. More control on waste shipments should help the industry to grow rather than placing a burden on local recyclers.

Sea freight from Europe to South East Asia and the Far East saw an increase due to IMO surcharge. The freight was almost raised by USD 200-300 in the last quarter. Shipping lines are not giving bookings so easily for waste shipments. They are ensuring sufficient security from exporters to make sure that if the containers are rejected for any reason whatsoever, they remain fully covered with regard to possible expenses. This in turn is placing an increasing burden on exporters.