Ministry of Environment Implements Public Stockpiling of PP Plastic... "Due to Decrease in Automobile Production"

PP Recycled Materials Used in Automotive Interiors
Clear Demand Shortage... Public Stockpiling to Begin from the 8th

PET Recycled Materials See Public Stockpiling and Export Recovery
Increased Distribution... Market Environment Slightly Improving

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] The Ministry of Environment will begin public stockpiling of recycled polypropylene (PP) raw materials used in automobile interior materials starting from the 8th. This is due to a sharp decline in sales of recycled PP raw materials caused by a decrease in automobile production and exports amid the COVID-19 pandemic.

The Ministry of Environment announced on the 4th that the global economic slowdown and reduced automobile production have clearly led to a decline in sales of recycled PP raw materials, and it plans to stockpile a total of 2,220 tons.

PP is a plastic material used in food containers such as gochujang (red chili paste) and instant rice, as well as lunch boxes. When recycled, it is mainly used for producing automobile interior materials and export pallets. However, due to the impact of COVID-19, automobile production has decreased, leading to a recent sharp drop in sales of recycled PP raw materials. Sales were 17,073 tons in March, 15,756 tons in April, and 12,320 tons in May, showing a declining trend.

Accordingly, after surveying public stockpiling demand from the 14th to the 27th of last month, the Ministry of Environment decided to stockpile a total of 2,220 tons of recycled PP raw materials. Public stockpiling will be conducted through a repurchase condition pre-purchase method, similar to recycled PET raw materials.

Additionally, the Ministry of Environment stated that the market environment for recycled PET raw materials is somewhat stabilizing as distribution volume gradually increases due to public stockpiling and partial resumption of exports.

Recycled PET raw materials, which saw a significant drop in sales after COVID-19, recorded sales of 18,350 tons in May due to increased exports and public stockpiling efforts. This has recovered to the March level (17,106 tons), when the impact of COVID-19 was less severe.

Asia Economy DB=Photo by Hyunmin Kim kimhyun81@

Accordingly, the Ministry of Environment initially planned to stockpile up to 10,000 tons, but due to some companies canceling or extending stockpiling amid export resumption, it now plans to stockpile only 8,500 tons by the end of this month. As of the end of last month, 5,747 tons have already been stockpiled.

The Ministry of Environment is continuously discovering domestic demand sources for recycled raw materials in cooperation with the Korea PET Bottle Recycling Association and the Packaging Material Refund Association, and is promoting the establishment of a notification system to restrict imports of waste PET to maximize domestic recycling of waste PET.

Polyethylene (PE), mainly used for pallets, household goods containers, and sewage pipes, is expected to see market improvement as exports to China resumed in April and public construction projects, the main demand source, have started issuing orders. Although PE is excluded from this public stockpiling volume, the Ministry of Environment plans to continuously monitor the market situation and implement necessary measures.

Meanwhile, regarding waste clothing, the Ministry is discussing support measures such as identifying necessary stockpiling volumes with related industries including the Korea Clothing and Textile Recycling Association. As major clothing import countries India and Cambodia recently lifted border closures, exports are expected to resume. The Ministry of Environment plans to monitor the backlog and implement related measures.

Lee Young-gi, Director of the Resource Circulation Policy Division at the Ministry of Environment, said, "Although signs of partial recovery in the plastic recycling market are emerging due to export resumption and public stockpiling, we are not letting our guard down and are continuously monitoring the market." He added, "We will work with the industry to diversify demand sources for recycled raw materials and continuously promote measures to stabilize the recycling market."

This content was produced with the assistance of AI translation services.