How can the Vietnamese plastic industry influence the ban on plastic scrap in China?

As of January 1, 1818, the Chinese government issued a ban on the import of plastic scrap, meaning that the country has to import plastic resins for domestic production. This is an opportunity for Vietnam plastic industry.

China is currently the largest plastic producer in the world (including both plastic and plastic products). Speeds are always on the rise, due to the high demand of automakers, mobile phones and food packaging, which have high plastic consumption. Meanwhile, China is the world’s largest producer of raw materials, but it is the ninth largest exporter of this raw material due to China’s huge domestic consumption.

Despite being the top producer in terms of output, China has also been the leading importer of plastic materials in recent years. Figures from Untrade show that each year China imports about 40 million tons of plastic, accounting for 20% of global imports of raw materials, mainly from the markets of Korea, Taiwan, Saudi Arabia, Japan (major global producer of plastic resins and Northeast Asia). Domestic raw materials are PVC (for construction industry) while PE, PP and PS are mainly imported.

For Vietnam, China is the main export market for plastic materials. According to the latest statistics of the GDC, in 2017 Vietnam exported 476.5 thousand tons of plastic materials, of which China accounted for 50% of the proportion of 236.9 thousand tons and 179.5 million USD, an increase of 99 , 87% in volume and 76.09% in turnover compared with 2016. The average export price was $ 757.62 per ton.

The failure to import plastic scrap from China will cause the country to import plastic resins to produce plastics.

According to statistics, each year China imported about 7.3 million tons of plastic grain, worth billions of dollars. This opens up a huge market for exports to China. This is also the time for Vietnamese plastic enterprises to expand their production capacity. In addition, when European countries are blocked from selling scrap materials to China, Vietnamese businesses have more opportunities to cooperate with businesses from Europe.

Although this is a big opportunity, the challenge is not small because the risk of fierce competition in plastic resin price among domestic enterprises is very easy to happen.

At present, many domestic enterprises are concentrating on collecting and investing in capital to increase production capacity, which can also lead to bankruptcy if China stops buying. Another risk is also environmental pollution if it is out of control.

In order to avoid over-reliance on traditional markets, Vietnamese businesses should look to niche markets. In addition to key export markets, Vietnam will increase its exports to markets such as Taiwan (China) and Japan with export volumes increasing more than 2.2 times each in 2017 compared to 2016. , although only reached 8.9 thousand tons and 12 thousand tons. In addition, in 2017 there are new markets that are Italy and Portugal with output of 1.3 thousand tons and 36 tons.

Despite the export of plastic materials, Vietnam has not been able to source materials. Plastic production capacity is up to $ 10 billion, but exports only $ 3 billion a year and imports $ 6-7 billion, which is a huge difference. Scrap is the essence of creativity in finding materials to minimize plastic imports. However, it is necessary to carefully select sources of scrap, to select clean scraps and quickly complete modern scrap recycling models to take the initiative in production and business.

To do this, a large plastic business in Vietnam has called on other plastic businesses to participate in the plastic trading platform, the plastic trading market and the high-tech plastic resin industry held by the company. . The platform will be operational from February 2018 after the company negotiated with the China Plastics Association on January 19. The high-tech plastics factory is being built on a scale of 181 ha in Ba Ria-Vung Tau province.

Prior to this proposal, the Chairman of the Vietnam Plastics Association strongly supported the development of sustainable and professional.