Is the market for 100 billion biodegradable plastics worth following?

In order to reduce the pollution of plastic products to the social environment, according to the "Opinions on Further Strengthening the Treatment of Plastic Pollution" issued by the National Development and Reform Commission and the Ministry of Ecology and Environment, it is stipulated that by the end of 2020, non-degradable disposable plastic straws are prohibited in the catering industry nationwide.

From January 1, 2021, the ban on plastic straws has officially taken effect nationwide. The catering industry has completely banned the use of non-degradable disposable plastic straws. The implementation of this ban has spawned a large number of market demand for biodegradable straws, and also attracted " Industry pains".

1. The strongest "plastic restriction order" is here, who is hurting?

1. The merchant is in pain

According to reporters’ interviews, industry insiders said that traditional non-degradable plastic bags are about 16,000 CNY/ton, and biodegradable plastic bags basically start at 26,000 CNY/ton. The price of a biodegradable plastic bag is usually two or three times that of ordinary plastic bags. The average cost of an ordinary plastic straw is about 0.03 yuan, and that of a paper straw is about 0.1 yuan. Other environmentally friendly straws are more expensive. Plastic restriction orders will not only increase costs, but the experience and shape of paper straws cannot meet the needs of young people. Therefore, businesses are facing a dilemma of rising costs and declining customer experience.

2. Consumers are in pain

The strongest plastic restriction order was launched, and the use of substitutes for plastic products such as paper straws and wooden spoons was poor, causing consumers to complain frequently. For example: the whirlwind of wheat won't move, the wooden spoon of KFC can't make soup, the milk tea paper straw will be broken if it breaks...

3. The manufacturer is in pain

The production of biodegradable technology requires high, raw materials are in short supply, and raw materials are rising. Many small factories are unable to compete. The imbalance of supply and demand is the soaring price of upstream raw materials. The reporter learned that PBAT rose from 24,000 CNY/ton in December 2020 to 26,000 CNY/ton in early January. Now it has exceeded 28,000 yuan, and some manufacturers even raised it to 30,000 yuan per ton.

2. Comparison of degradable products

Bioplastics are innovative materials whose raw materials are of biological origin or biodegradable, namely bio-based plastics or degradable plastics. Bioplastics include materials such as PLA, PHA, PBS, PSM and PE, while degradable plastics refer to plastics that can be degraded under the action of biology and light after the plastic is discarded. According to whether the raw materials are biological materials and whether they are biodegradable, plastics can be divided into four types.

According to the way of plastic degradation, plastics can be divided into light-degradable plastics, bio-degradable plastics, and bio-/light dual-degradable plastics. Biodegradation is currently the main degradable method of plastics.

Starch-based plastics can reduce the amount of petroleum-based materials, and the materials are cheaper than PLA, but they can be completely molecularized and degraded only when blended with degradable plastics, and they have the problems of water resistance, poor mechanical properties, and short life span; PHA has good biocompatibility and can be completely degraded, but the current production cost of PHA is very high; PBS has good performance, has good heat resistance and mechanical properties, and can also be completely biodegradable, but China’s succinic acid production capacity Limited, so PBS could not be mass-produced.

PLA and PBAT are currently the two main types of degradable plastic products in the country. PLA has excellent biocompatibility and biodegradability, and is currently the fastest industrialized biodegradable material. The PBAT molecular chain has good flexibility and Excellent membrane performance. These two plastics have almost no shortcomings in impact resistance, stretching and elasticity, and the domestic technology is relatively mature. They are currently the most promising degradable plastics.

3. The status quo of national industry development before the "plastic limit order"

1. Output

The output of plastic products in China increased year by year from 2011 to 2016, and began to decline in 2017. In 2018, the output of plastic products in China was 60.421 million tons, a year-on-year decrease of 19.60%. In 2019, the output of plastic products in China was 81.842 million tons, an increase of 35.45%. According to the data released on the website of the Ministry of Industry and Information Technology. From January to December 2020, the national plastic products industry completed an output of 76.032 million tons, a year-on-year decrease of 6.5%. In December, the national plastic products industry completed 7.748 million tons of output, a year-on-year increase of 0.3%.

2. Market size

From the perspective of market size, in 2019, the total output of the national plastic products industry was 81,841,700 tons, a year-on-year increase of 3.90%. According to the "Thirteenth Five-Year Development Plan Guidance for the Plastics Processing Industry", from 2016 to 2020, the average annual growth rate of plastic products enterprises above designated size in my country will reach 4%; the average annual growth rate of main business income will be 6%; the average annual growth rate of total profits will be 8%; the average annual growth rate of export volume is 3%, the average annual growth rate of export volume is 6%, and the market size shows an overall growth trend.

3. Geographical distribution

In terms of regions, the production of plastic products in my country is mainly concentrated in Guangdong, Zhejiang, Anhui, Jiangsu, Fujian, Hubei and other regions. The total output of the top five provinces accounted for 55.38%.

4. Forecast of the plastics industry after the "plastic limit order"

1. Forecast of overall market size

According to the report of the Prospective Industry Research Institute, my country is a major consumer of plastics in the world, and plastic consumption accounts for 15% of the world. Under both policies and market forces, the degradable plastics industry has a huge market space. The Huaan Securities Research Report pointed out that the nationwide ban on plastics promoted by China this time will stimulate the steady growth of domestic demand for biodegradable plastics. By 2025, the demand for degradable plastics in China is expected to be 2.38 million tons, and the market size can reach 47.7 billion yuan; by 2030, the demand is expected to be 4.28 million tons and the market size can reach 85.5 billion yuan. On the whole, my country's biodegradable plastics market has broad prospects, and the development of the industry can be expected.

2. Market size forecast of segmented products

According to the "Opinions" issued by the National Development and Reform Commission at the beginning of the year and the Ministry of Agriculture's management regulations on agricultural film, Soochow Securities has sorted out the areas that are expected to be the first to develop biodegradable plastics, including express packaging, disposable plastic tableware, plastic shopping bags and agricultural mulch film. The demand for biodegradable plastics in the four sectors reaches 1 million tons, 700,000 tons, 500,000 tons and 300,000 tons respectively, forming a total market space of about 2.5 million tons and a market scale of about 50 billion yuan. The degradable plastic space in the fields of express delivery, takeaway, agricultural mulch and packaging plastic bags can reach 920,000 tons, 220,000 tons, 400,000 tons and 440,000 tons respectively, for a total of 1.98 million tons, corresponding to a market of over 30 billion yuan.

Five, industry admission attention

A few years ago, few domestic companies set foot in the field of biodegradable plastics. Since 2020, more and more companies have come in. They want to enter this market regardless of whether they have related technologies or not. In addition to leading companies, small and medium-sized enterprises also hope to get a share of the pie, but in the case of the market boom, can small and medium-sized enterprises enter the market hastily? Do you need to do the preliminary research and preparation?

1. Supply and demand imbalance, beware of price war chaos

At present, due to the huge impact of the "plastic restriction order", a company in Zhejiang that is capable of producing biodegradable materials said: "The order has already been placed in March. Some dealers hope to sign a half-year agreement and have to pay the money first. But we were afraid that the goods could not be supplied, so we did not dare to sign." The general manager of the company used "explosive growth" to describe the order volume during this period.

The imbalance of supply and demand is the soaring price of upstream raw materials. The reporter learned that PBAT has risen from 24,000 CNY/ton in December 2020 to 26,000 CNY/ton in early January. Now it has exceeded 28,000 yuan, and some manufacturers even raised it to 30,000 yuan per ton. During this period of time, businesses can also clearly feel the crazy upsurge of upstream raw materials for biodegradable plastics. “Not long ago, the price of PBAT was still 24,000 CNY/ton, but now it has risen to 28,000 CNY/ton, and it’s still difficult to get the goods.” And in the communication with upstream suppliers, many businesses can also clearly feel To the strength of the supplier. "Some suppliers clearly told me that they may be out of stock in the next year and prices will continue to rise."

However, with the increasing influx of hot money and enterprises, the industry is likely to fall into a vicious circle of disorderly competition. Nowadays, many leading companies have entered the game. They have advantages in scale and technology. If a price war is initiated, the market will fall into chaos.

2. Small and medium-sized enterprises with no advantages in technology and scale need to accumulate a customer base first

For small and medium-sized enterprises that have not accumulated technology before, industry insiders have also given advice: It is best not to enter the field of degradable plastics rashly. "You only have a solid customer base, and then carry out related research and development according to customer needs, so that it is more secure."

At present, if the degradable plastics industry wants to achieve explosive development, the most important thing is to solve the problem of shortage of raw materials, which also provides opportunities for enterprises to seize the market. Some enterprises are exploring the realization of the whole industry chain development through active layout. Only by cutting into the upstream raw material link and realizing the development of the whole industry chain can we take the initiative in the future market competition.

Although the plastic restriction order will cause pains in the industry in the short term, in the long run, reducing the use of plastic is a benefit for generations to mankind and the entire global environment. At the same time, for the plastics industry, it is degradable. The advancement of plastic technology can also promote the technological innovation of the entire industry, and promote the industry to continue to move towards a healthier and higher technological content. With the evolution of processing level and material characteristics, the plastics processing industry will also become an innovative high-tech manufacturing industry integrating new materials, new technologies and new processes.

In addition, the reporter was also informed that from 2019 to 2020, many countries in Asia have issued plastic restriction policies, including China, Pakistan, India, the Philippines, Thailand, Algeria and other countries. In the future, the demand for biodegradable plastics in Asia will Rapid growth is expected to replace Europe as the largest consumer market for biodegradable plastics.