Plasticizing B2B: Urgent! New Coronavirus Outbreak May Reduce PE dDemand by 1.5 Million Tons in China

01 The Outbreak of New Coronavirus May Reduce China's PE Demand by 1.5 Million Tons

A senior analyst at ICIS said the coronavirus outbreak could reduce China's demand for polyethylene (PE) by 1.5 million tons. "If the coronavirus outbreak is under control and by the second half of March, the downstream industry will resume operations at a rate of 70-80%, then the demand for PE of about 1.5 million tons may reduce due to the outbreak," said Amy Yu, senior analyst in China at ICIS Asia petrochemical analysis company.

According to ICIS data, China's PE consumption in 2019 is estimated to be 35 million tons. China's PE demand usually recovers after the Lantern Festival, a week after the Lunar New Year holiday.

"The average operating rate of downstream plants is estimated to be around 40%, because there are no workers before the end of February," Yu said The analyst pointed out that the demand for blow molded HDPE for drug bottles is increasing, but it accounts for less than 2% of the total demand for PE.

"The biggest impact is packaging consumption, which is estimated to have lost 1 million tons of PE demand. The plastic film used for packaging consumed about 18 million tons of PE in 2019, accounting for 51% of the PE demand in 2019. "

One trader estimates that China's total demand for PE and polypropylene (PP) in the first quarter could fall about 30% year-on-year. Others estimate that demand for PE and PP is likely to lose 7-8% throughout the year.

The biggest drop in demand will come from the automotive, FMCG and packaging industries. Some municipal governments have called for the closure of all restaurants and stores except supermarkets and pharmacies. Due to the expected pick-up of seasonal demand, many businesses start to store goods before the Spring Festival, which makes businesses in a difficult situation.

According to the source, inventory levels in the warehouses of major producers are high and waiting for trucks to move them out. It turns out that long-distance delivery across provinces and cities is very difficult because drivers need permits to cross the road.02 Emergency Conversion of Baofeng Energy Group to Polypropylene

Recently, Baofeng energy Group changed production urgently to produce high melting finger fiber polypropylene s2040, which can be used for medical non-woven fabric manufacturing. It is estimated that the production line will produce more than 1000 tons of s2040 per day before February 15.

Each ton of products can be made into 900000-1 million disposable surgical masks or 200000-250000 N95 masks. Baofeng energy Group has also reached a cooperation agreement with Dawn Co., Ltd., the largest producer of PP melt blown special materials for mask cloth in China.

03 Innovia Expands the Certification of BOPP Film Recyclable Products

Innovia film, a British BOPP film manufacturer, decided to extend the test plan to all of its film products after successfully obtaining the certification of propafilm strata products.

Innovia film, in cooperation with interseroh, evaluated its high barrier BOPP propafilm strata SL film in August 2019, which is an independent recyclable and consulting company in Germany. The film has a "very good" rating and a "made for recycling" logo. The product has been used by wildcorn, a German fast food manufacturer, to package its organic popcorn product line.

After successfully obtaining the recyclable certification, the company decided to expand its test program to all its uncoated, acrylic coated and EVOH barrier series films.

Interseroh analyzes and evaluates packaging according to sound standards and the entire post use process (collection, classification, recycling and processing). Their analysis turned out to be a very good rating from scratch.

"This certification provides us with independent confirmation that our polypropylene film can be completely recycled," said Stephen langstaff, global business director, packaging, Innovia film.

At present, the collection of flexible packaging is limited throughout Europe, which means that this valuable resource is being wasted.Products made of polypropylene can be recycled and reprocessed into polymer particles every day for various commercial and industrial applications, such as the molding of plastic parts in the automobile industry.

Langstaff added: "if the collection stream is standardized in the UK and Europe, polypropylene and other polyolefins can be recycled and reused, there is no big problem. Innovia's next step is to work with partners to develop a process that meets food requirements so that recycled materials can be reprocessed into films. "

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