Don’t take China for granted as buyer of recycled materials, warns Simon Ellin

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The chief executive of The Recycling Association has warned that the UK market must not assume China will always buy from the UK as it does now.

Speaking at this week’s Secondary Commodity Markets Conference in Liverpool, Simon Ellin said that China is shutting 200 old paper mills per year and is upping its material quality requirements in order to prove its environment.

He added: “Import licences into China have been reduced by 20% this year and this means that the buying from the big exporters may be restricted.

“Some think this might be bluster. But it reflects the Chinese green movement and the need for more usage of domestic material. China also has a focus on the circular economy.”

He also warned that 30% of the Chinese market is now supplied by its own domestic sources and that the effect of this is like 650,000 tonnes being taken off the market each year.

Therefore, to ensure the UK remains a key market for China, quality needs to improve and joint responsibility needs to be taken throughout the supply chain.

This means “local authorities need to police what goes into MRFs” he said. While illegal operators also need to be weeded out.

He added that in order to position the UK as China’s preferred outlet for material, that moisture must be reduced, including building a roof on a storage area if it does not have one.

Also speaking at the conference was BPI external affairs director Mike Baxter. He said that it simply was not true that the falling price of oil had led to reduced prices for secondary plastics.

“The facts are these,” he said. “The number one factor is price against virgin material and the availability of scrap.

“When the oil price fell, the price of virgin polymer did not fall. We were told virgin would be cheaper than recycling and it wasn’t.

“There was a bit of a dip in virgin HDPE price in 2015, but in summer last year the price had almost reached an all-time high.

“Big primary manufacturers all had outages at the same time and called force majeure and this kept virgin prices high.”

However, he warned that the PRN system needed to be reformed in order to create a level playing field between domestic recyclers and exporters.