China bans single-use plastic

On 19 January, China's National Development and Reform Commission and the Ministry of Ecology and Environment announced policies aimed at restricting production, sale, and use of single-use plastic products. Wood Mackenzie senior consultant William Liu said:

"This will certainly impact plastic consumption and going forward, the petrochemical industry. Polyethylene consumption will be impacted as it is the main feed to produce bags and packaging films. But as plastic bags and straws are only one application of plastic, it will not have a major impact on the oil industry.

"The plastic ban will impact polyethylene consumption, but as it is first carried out in major cities and only applying to single-use plastic such as supermarkets bags, straws, tableware, hotel disposables, the impact would be limited in 2020.

"But going forward, as the ban rolls out to more cities and substitute materials gain traction, China's polyethylene consumption will be impacted. China is the largest polyethylene importer in the world. The country consumed more than 33 million tonnes of polyethylene in 2019 of which 40% is imported from producers in the Middle East and other Asian countries. The single-use plastic ban might impact import volume."

On scrap ban, Liu added:

"China has already applied a scrap ban since the start of 2018. It only imported around 10kta polyolefins scrap in 2018 and 2019, dropping from 3 million tonnes in 2017. So the new scrap ban will not have a major impact on polyolefins markets.

"The efficiency of the Directives will depend on many factors such as the development of substitute materials. At present, compared with materials such as paper, glass, wood, and metal, plastic has many advantages in daily use, such as being lightweight, easy to process, convenient, and most of all, it is price competitive."