Under the global oil price increase and the Chinese ban, the volatility risk of the plastics market has further intensified, and the profit of the plastics industry is rapidly declining. From January to April this year, the profit of the plastics industry fell by 4.69% year-on-year, only 4.91%.

Increased risk of fluctuation in the plastics industry

1. Reduced waste plastics

"This year China's imports of waste plastics have basically stopped completely," said Gao Chunyu, an expert at the China Petrochemical Economic and Technological Research Institute. Statistics show that from January to April this year, China imported only 3,200 tons of vinyl waste plastics, compared with more than 100,000 tons per month. This shows that the import of waste plastics in China has basically been completely stopped. At the end of 2017, China announced that it would stop importing waste materials, which accounted for a considerable portion.

2, crude oil rose sharply

At the same time that China's waste plastics basically stopped importing, international crude oil prices have risen sharply. International New York crude oil prices have risen from US$60/barrel at the beginning of the year to US$73/barrel. Domestic companies are suffering from rising costs. Data show that from January to April this year, the output of the plastics industry increased by 2.32% year-on-year, and the main business income increased by 6.69% year-on-year, but the industry profit decreased by 4.69% year-on-year to 4.91%. And the entire industry showed a significant downward trend.

3. The rise of the raw material industry

“One-third of the domestic plastics industry relies on waste plastics as raw materials, while imported wastes account for 1/10. The reduction in waste plastics has driven the rise of the entire raw materials industry.” Guo Yongxin, deputy secretary-general of the China National Light Industry Council, said similar situations. Occurred in the domestic pulp industry. While prohibiting waste plastics, China also banned the import of waste paper, which led to the increase in domestic waste paper prices, which led to the increase in domestic pulp prices, which led to a trend of rising global prices.