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Plastics Producers Could Benefit From China Policy Change

China's vow to ban imports of plastic waste by the end of the year could increase demand for new plastics.

China's vow to ban imports of plastic waste by the end of this year could increase demand for new plastics, including materials made in the U.S.

Last year, China took in 7.3 million tons of plastic garbage — more than any other country in the world — but the country opted to stop accepting those shipments as part of an effort to curb pollution.

IHS Markit, according to Reuters, predicted that the decision would decrease the amount of recycled plastic on the market and, in turn, help drive up demand for plastics manufacturers. Analysts expected Asia's overall plastic demand to grow by 5.5 percent from 2017 to 2018, with demand for polyethylene increasing by 6.6 percent over that span. China accounts for about two-thirds of the region's plastic demand this year.

China currently imports polyethylene — used to make pipes, packaging, plastic bags and a variety of other products — from petrochemical companies in the Middle East, Singapore, Thailand and South Korea.

Some reports, however, suggest that rising polyethylene capacity in the U.S. could allow domestic producers to capitalize on increasing demand from China. China, Canada and Mexico accounted for nearly half of U.S. polyethylene exports last year.

The report also suggested that rising "medical tourism" in Asia could fuel increased demand for polyethylene for use in medical tubes, syringe plungers and other devices.


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