Impact of Environmental Protection Inspection on Polyolefin

SCI99 Edit at: 2017-9-11 15:40:45
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In 2017, under the strict environmental protection inspection, "scattered, messy, pollutional" plastic processing enterprises were shut down, leading to a decline in overall operating rate and production in plastic products industry. But the environmental protection policy will contribute to the transformation and upgrading of plastic products industry as well as the green and sustainable development of polyolefin industry.

Source: National Bureau of Statistics of PRC

2015–2017 Chinese Plastic Products Production Contrast

In 2017, due to the new environmental protection policy, atmosphere and water pollution control action plan, as well as the large-scale environmental protection inspections to above 15 provinces, including Hunan, Anhui, Xinjiang, Tibet, Guizhou, Sichuan, Shanxi, Shandong, Tianjin, Hainan, Liaoning, Jilin, Zhejiang, Qinghai, Fujian, etc., many small-scale "scattered, messy, pollutional" enterprises were shut down. Meanwhile, the production of plastic products centralized in Zhejiang, Guangdong, Hubei, Shandong, Anhui and Hebei Province, thus, the China’s production of plastic products decreased.

According to SCI, the average operating rate in PE’s downstream packaging industry was 57% in H1, 2017, while the one in pipe industry was 45%. Besides, the average operating rate in PP’s downstream plastic weaving industry was about 65%, decreasing form last year.

However, according to the chart, the production trend of Chinese plastic products in 20152017 kept concurrent except in April. Therefore, one certain trader indicated that although small-scale substandard enterprises stopped producing plastics, large-scale enterprises were still in production. And the demand for plastics didn’t decrease. Thus, the negative effect of the environmental protection inspection on downstream demand was not persistent. It contributed to the normalization and intensification of plastic products industry. In addition, impacted by the prohibition on waste plastic, the demand for waste plastic was transformed to virgin materials such as PP and PE. According to the statistics released by SCI, the import volume of recycled PE was about 2,532.4kt, while the production of virgin materials was 14,515.4kt, so the growth space of transferred demand was large.

In conclusion, due to the environmental protection inspection, the downstream demand declined a little, in line with our predictions. But it didn’t bring continuous negative effects. And it contributed to the transformation and upgrading of plastic products industry, which would promote polyolefin industry to develop sustainably.

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