TABLE OF CONTENTS

ABSTRACT...................................................................................................................... 2

LIST OF FIGURES ........................................................................................................... 3

CHAPTER 1 – INTRODUCTION .................................................................................. 4

CHAPTER 2 – GENERAL TRENDS IN INTERNATIONAL TRADE/ 9

PRODUCTION, INTERESTING FINDINGS AND DATA ANALYSIS .......................

CHAPTER 3 – CONCLUSIONS ...................................................................................... 21

REFERENCES .................................................................................................................. 23
 ABSTRACT

The objective of this study is to understand the global and country level trends for the plastics
industry. Data from various statistical websites have been used to draw up charts to understand the
trend between 2001 to 2017. Plastics was chosen as the sector of interest because plastic materials
are being used abundantly in the world today. Plastics are being used in all other sectors be it the
electrical and electronic sector, pharmaceutical, automobiles and also in building and construction.
Therefore the main exporting countries and the trend will be analysed to understand who the main
exporters, the past and current trend and the insights into these trends.

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 LIST OF FIGURES

Figure 1: Oil and Gas Uses 4

Figure 2: Plastics Applications in 2015 5
Figure 3: Plastics Product Category Breakdown According to HS Code 6
Figure 4: Top 10 Product Categories Under Product Code 39 8
Figure 5: Global Trend of Total Export Value of Plastics and Articles Thereof, from 9
2001 – 2017
Figure 6: Global Trend of Total Export Value Polymers of Ethylene, in primary forms 10
from 2001 – 2017
Figure 7: Total Export Value of Plastics and Articles Thereof by United States of 11
America
Figure 8: Total Import Value of Waste, Parings and Scrap, of Plastics 13
Figure 9: Top 10 Exporters of Plastics and Articles Thereof 14
Figure 10: Total Export Value for Germany, United States and China of Plastics and 14
Articles Thereof
Figure 11: Total Export Value for Plastics and Articles Thereof by Top 3 Exporting 15
Countries
Figure 12: Comparison of Total Export Value of Electrical Products Between China, 16
USA and Germany
Figure 13: Comparison of Total Export Value of Toys, Games and Sports Requisite 17
Between China, USA and Germany
Figure 14: Total Labour Force Comparison 17
Figure 15: Trend of Polymers of Ethylene, Export Value by Countries 18

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CHAPTER 1 - INTRODUCTION
What Are Plastics
The term plastic comes from the Greek word “plastikos”, that means fit for moulding. Fit for
moulding simply refers to the character of plastics during manufacture. Plastics can be cast, extruded
or pressed to form a variety of shapes. Plastics are organic materials. Plastics are produced using
natural raw materials such as cellulose, salt, natural gas and crude oil. About 4% of annual total
usage of oil and gas in the world is used for plastics production.

Chart: The Conversation, CC-BY-ND Source: British Plastics Federation

Figure 1: Oil and Gas Uses
History of Plastics
John Wesley Hyatt invented the first polymer in 1869. Hyatt found a plastic that was pliable and
easily shaped by treating cellulose from cotton fiber with camphor. Following this, in 1907, Leo
Baekeland invented Bakelite. This is the first fully synthetic plastic, meaning that it was not made
from natural materials. Modern plastics is stated to be developed around 100 years ago.
Types of Plastics
There are two main processes for production of plastics - polymerization and polycondensation.
Bsased on these processing methods, plastics can be categorized into two types:
• Thermoplastics (soften when it is heated, hardens when it is cooled)
• Thermosets (after being moulded, will not soften)

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Global Trend of Plastics
Plastics production is an industry that has high growth potentials. In the recent years, plastic export
has increased as plastics are being used in a variety of key end user industries such as electrics and
electronics, packaging, building and construction, automobiles and pharmaceuticals. One of the
characteristics of plastic is lightweight, and this characteristic has caused plastics to be used more
and more even to replace metal parts of automobiles. Even the aviation industry has increased the
usage of plastics. In the pharmaceutical sector, plastics is also playing an important role to replace
devices made of metal, ceramic and other substances. The packaging industry is also flourishing and
more efficient plastics packaging products are being developed. In 2015, one third of plastics
produced were used in packaging. As such it is extremely likely that these industries which heavily
rely on plastics will use more, and not less, plastics. The graph below shows all applications for
plastics in 2015.

Chart: The Conversation, CC-BY-ND Source: Science Advances (2017)

Figure 2: Plastics Applications in 2015
Since plastics have become a key component in many industries, it would be interesting to study the
types of plastics materials that are being exported globally and the trend of the exports of plastics in
the world. This study will also look into the top 10 exporters in the world and how this list has
changed over the period of 2001 to 2017. Data from International Trade Centre (ITC) and various
other websites will be used to enhance this study. The study will also look into one major product
type under HS Code 39: Plastics and Articles Thereof, which is polymers of ethylene, in primary
forms (code 3901). The trend of export and the top exporters of polymers of ethylene will be
reviewed from 2001 to 2017 to see if there are changes over these years.

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Breakdown of Plastics and Articles Thereof, according to Product Code (HS Code)
Product Details of Plastics Product Category Breakdown Exported value
Code HS) in 2017 (Billion
US dollars)
3901 Polymers of ethylene, in primary forms 1.37
3926 Articles for the conveyance or packaging of goods, of plastics; 1.02
stoppers, lids, caps and other ...
3920 Plates, sheets, film, foil and strip, of non-cellular plastics, not 1.01
reinforced, laminated, ...
3907 Polyacetals, other polyethers and epoxide resins, in primary forms; 0.88
polycarbonates, alkyd resins, ...
3923 Articles of plastics and articles of other materials of heading 3901 to 0.63
3914, n.e.s.
3902 Polymers of styrene, in primary forms 0.58
3921 Polymers of propylene or of other olefins, in primary forms 0.49
3917 Acrylic polymers, in primary forms 0.27
3903 Self-adhesive plates, sheets, film, foil, tape, strip and other flat 0.19
shapes, of plastics, whether ...
3919 Plates, sheets, film, foil and strip, of plastics, reinforced, laminated, 0.15
supported or similarly ...
3904 Tubes, pipes and hoses, and fittings therefor, e.g. joints, elbows, 0.14
flanges, of plastics
3924 Amino-resins, phenolic resins and polyurethanes, in primary forms 0.12
3909 Tableware, kitchenware, other household articles and toilet articles, 0.10
of plastics (excluding ...
3906 Waste, parings and scrap, of plastics 0.09
3908 Polymers of vinyl chloride or of other halogenated olefins, in 0.08
primary forms
3925 Polyamides, in primary forms 0.08
3918 Builders' ware of plastics, n.e.s. 0.07
3911 Polymers of vinyl acetate or of other vinyl esters, in primary forms; 0.05
other vinyl polymers, ...
3916 Silicones in primary forms 0.03

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3910 Petroleum resins, coumarone-indene resins, polyterpenes, 0.03
polysulphides, polysulphones and other ...
3912 Floor coverings of plastics, whether or not self-adhesive, in rolls or 0.02
in the form of tiles; ...
3915 Baths, shower-baths, sinks, washbasins, bidets, lavatory pans, seats 0.02
and covers, flushing cisterns ...
3905 Monofilament of which any cross-sectional dimension > 1 mm, 0.01
rods, sticks and profile shapes, ...
3922 Cellulose and its chemical derivatives, n.e.s., in primary forms 0.003
3913 Natural polymers, e.g. alginic acid, and modified natural polymers, 0.003
e.g. hardened proteins, ...
3914 Ion-exchangers based on polymers of heading 3901 to 3913, in 0.0005
primary forms
Sources: ITC calculations based on UN COMTRADE statistics.
Figure 3: Plastics Product Category Breakdown According to HS Code

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Top 10 product categories under product code 39: Plastics and Articles thereof

Sources: ITC calculations based on UN COMTRADE statistics.

Figure 4: Top 10 Product Categories Under Product Code 39

The top 3 category of plastic products exported in 2017 are:

a. 3901 - Polymers of ethylene, in primary forms (17%)
b. 3926 - Articles for the conveyance or packaging of goods, of plastics; stoppers, lids,
caps and other ... (16%)
c. 3920 - Plates, sheets, film, foil and strip, of non-cellular plastics, not reinforced,
laminated, ... (13%)

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CHAPTER 2 - GENERAL TRENDS IN INTERNATIONAL TRADE/PRODUCTION,
INTERESTING FINDINGS AND DATA ANALYSIS
2.1 Trend# 1 - Global Trend of Total Export Value of Plastics and Articles Thereof From 2001
- 2017 (in Billion USD)
The trend of plastics in general and polymers of ethylene, which is the highest category being
exported is reviewed.

Sources: ITC calculations based on UN COMTRADE and ITC statistics.

Figure 5: Total Export Value of Plastics and Articles Thereof (2001 – 2017)
Findings:
1. The chart shows an upward trend from 2001 to 2008. From 2008 to 2009, there is a drop in
the trend by 18.31%.
2. After 2009, there is a steady rise in the total export value of plastics until 2014. From 2009 to
2014, the total export value increased by 58.64%.
3. From 2014 to 2016, the chart is showing a down trend, indicating a drop in the total export
value of plastics by 12.12%.

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 4. The total export value started increasing from 2016 to 2017, whereby the chart is showing an
up trend.

Sources: ITC calculations based on UN COMTRADE and ITC statistics

Figure 6: Global Trend of Polymers of Ethylene, in primary forms Export Value from 2001 – 2017
Findings:
1. In general, both the charts are showing quite similar trends. There is an upward trend from
2001 to 2008.
2. From 2008 to 2009, there is a drop in the trend by 19.13%
3. After 2009, there is a steady rise in the total export value of polymers of ethylene until 2014.
There are two flat trends between the year 2011 to 2012 and the year 2013 to 2014. However
the total values of exports are still increasing from 2009 to 2014 by 60.91% .
4. From 2014 to 2016, the chart is showing a down trend, indicating a drop in the total export
value of polymers of ethylene by 12.21%.
5. The total export value started increasing from 2016 to 2017, whereby the chart is showing an
up trend.

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Analysis:
1. The drop in the trend from 2008 to 2009 can be associated with the financial crisis that hit the
world in 2008. According to the American Chemistry Council (ACC) Plastics Industry
Producers’ Statistics (PIPS) Group, the production of resin in general fell to 101.5 billion
pounds in 2008, down 12.3 percent from 2007. In terms of total sales for the year, total sales
dropped to 104.2 billion pounds. This shows a 10.1% decrease from 2007 and a seven-year
low. It is said that in 2008, the US plastics resin industry experienced a historic decline due to
the global recession (refer to Figure 7 below). In 2008, the US recession spread to other
countries. Global economy growth slowed down, from a 5 percent pace in 2007 to 3.4 percent
in 2008. World trade was affected by the credit crisis and world trade volumes declined.

Sources: ITC calculations based on UN COMTRADE and ITC statistics.

Figure 7: Total Export Value of Plastics and Articles Thereof by United States of America (US)

2. In 2015, crude oil prices fell and this caused a slight drop in the export value of plastics and
polymers of ethylene but the export value began to rise after 2016. Ethene or ethylene is one
of the main raw materials that is used to produce plastics. Ethylene production is highly
impacted by crude oil, therefore the performance of the plastics industry has been intertwined
with those of crude oil. In 2014, the price of crude oil was USD96.29/barrel. The price
dropped to USD40.68 in 2016.
There are 5 factors that caused oil price to drop:
(a) The Strong US Dollar – this is the main driver for crude oil price decline. When the
value of the dollar is strong, the value of commodities fall.

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 (b) OPEC (Organization of the Petroleum Exporting Countries) – Iran, Venezuela and
Algeria agreed to reduce production. Saudi Arabia, the United Arab Emirates and other
gulf allies disagreed to reduce production. Iraq actually increased production. This
actions caused an oversupply of oil, that caused oil prices to drop further.
(c) Oversupply of crude oil – Oil inventories increased. The Energy Information
Administration (EIA) reported on Sept. 30, 2015, that US crude oil inventories were at
their highest level, at almost 500 million barrels.
(d) Declining Demand – The economies of Europe and developing countries were
declining and vehicles were becoming more fuel efficient, thus causing demand for fuel
to lag. China’s devaluation of its currency caused the global demand to drop as China
was one of the top importers of oil.
(e) Iran Nuclear Deal – With this deal with the US, more Iranian oil exports were allowed
as the deal removed Western sanctions against Iran.

Impact of Crude Oil Price Decline to the Plastics and Polymes of Ethylene
(Polyethylene) Sectors:

1. Rise in demand and production of plastics

As the price of crude oil reduces, the cost of making plastics and polyethylene dropped
significantly, This created a rise in both demand and production. From the graph on the
trend of plastics and polymers of ethylene, we can see the after effects of the crude oil
price settling in, whereby a rise in exports in 2017 is observed.

2. Decrease in demand for recycled plastics

Due to lower cost of crude oil, it is more cost effective to produce virgin plastics resins
than to recycle plastic wastes. Recycling process requires huge amount of water and
energy. It is also a labour intensive process. Therefore, there is a reduction in the number
of plastic wastes being imported, as many companies opt to use virgin material in their
processes. China, Hong Kong and the United States of America are the top 3 importers of
plastics waste. Figure 8 below shows that there is a steady reduction in total imports from
2015 onwards. This started to cause more environmental impacts due to large amounts of
unconsumed plastics wastes.

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 Sources: ITC calculations based on UN COMTRADE and ITC statistics.
Figure 8: Total Import Value of Waste, Parings and Scrap, of Plastics

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2.2 Trend#2 - Top 10 Exporters for Plastics and Articles Thereof (2001 = 2017)
Total export value from the world from 2001 – 2017 is USD 7508 billion. Out of this, the top 10
exporters contributed 62.68% of total export value. The top 10 exporters based on total export value
during this period is as shown in Figure 9 below.

Sources: ITC calculations based on UN COMTRADE and ITC statistics.

Figure 9: Top 10 Exporters of Plastics and Articles Thereof

The 3 main countries contributing to the total growth are Germany (19%), United States of America
(17%) and China (13%). The trend of the export value of these 3 countries were then analysed
further to identify which country showed more growth from 2001- 2007.

Sources: ITC calculations based on UN COMTRADE and ITC statistics.

Figure 10: Total Export Value for Germany, United States and China of Plastics and Articles
Thereof

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 Sources: ITC calculations based on UN COMTRADE and ITC statistics.
Figure 11: Total Export Value for Plastics and Articles Thereof by Top 3 Exporting Countries

Findings:
1. Germany showed a steady growth from 2001 to 2014. In 2015, Germany’s total export value
dropped. However, from 2016 until 2017, the total export started to rise again. However, the
exported value is lower than that of China.
2. The United States of America showed steady growth from 2001 to 2014 as well. In 2015 and
2016, there was a drop in total export value. The total export value has picked up in 2017.
3. China has shown the same scenario as the United States. However, total export value from
China exceeded Germany in 2015. China exceeded the total export value from the United
States as early as in 2013 and this trend continued till 2017, causing China to be the largest
exporter for plastics and articles thereof in 2017.

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Analysis:
1. The general trend that is found in all 3 countries is mainly contributed by the drop in crude oil
prices in 2015.
2. China started to increase its total plastic exports value from 2013 due to the following factors:
(a) Increase in demand from other key end user industries. We can review for example,
electrical and toys export value from China to understand this. Both sectors use a lot of
plastics. Figure 12 shows a comparison of the total export value for electrical products
while Figure 13 shows a comparison of the total export value for toys between the 3
countries. China has a higher trend for electrical products and toys, thus causing the
demand for plastics to be higher as well. This shows that increase in demand for other key
end user industries has increased the demand for plastics in China.

Sources: ITC calculations based on UN COMTRADE and ITC statistics.

Figure 12: Comparison of Total Export Value of Electrical Products Between China, USA and
Germany

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 Sources: ITC calculations based on UN COMTRADE and ITC statistics.
Figure 13: Comparison of Total Export Value of Toys, Games and Sports Requisite Between China,
USA and Germany

(b) Usage of recycle plastic materials has lowered the cost of plastics production in China,
thus causing an increase in demand and investments in China. Figure 8 shows the total
imports of plastic wastes by China. The process of recycling plastic wastes is very labour
intensive. As shown in Figure 14 below, China has the largest number of work force
compared to the US and Germany. China has facilities for recycling readily available and
thus is not affected badly when crude oil price rises. However, in the long term, China
faces the issue of having an oversupply of plastics wastes.

Source: World Development Indicators

Figure 14: Total Labour Force Comparison
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2.3 Trend #3 - Top 10 Exporters for Polymers of Ethylene, in Primary Forms (2001 = 2017)
Polymers of ethylene is the product category with the highest export value. The trend of the countries
exporting polymers of ethylene was investigated.

Sources: ITC calculations based on UN COMTRADE and ITC statistics.

Figure 15: Trend of Polymers of Ethylene, Export Value by Countries
Findings:
1. Belgium and United States of America used to be the highest exporters however Saudi Arabia
is now the top exporter of polymers of ethylene, in primary forms. The export from Saudi
Arabia started to rise from 2009 onwards. There was a slight downtrend from 2014 to 2016,
but an upward trend can be seen from 2016 to 2017.
2. Singapore does not have oil or gas resources. Singapore has limited land space. However,
Singapore is the 4th highest country exporting polyethylene.

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Analysis:
1. Saudi Arabia
Saudi Arabia is aiming to become the world’s top 10 exporter of plastics. Due to the current low oil
prices, the shift towards plastic processing is showing the potential to become the game changer for
this region. The focus on plastic processing is to support the economic diversification programs in
the Gulf Cooperation Council (GCC).
(a) Rising demands
The increase in polymer production in the GCC region is mainly due to increase in exports
and increase in local demands. Plastic exports are the largest contributor in the non-oil sector
thus accounting for 35% of the non-oil revenues for Saudi Arabia.
(b) Industrial Parks
As part of the diversification programs planned, a few petrochemical complexes have been
and is being built to develop new downstream industries, thus reducing dependency on oil
and by-passing the volatility of the market. Some examples are:
• Petro Rabigh and Yansab started up new gas-phase plants in Saudi Arabia. In 2010,
there were major capacity additions by Qatofin in Qatar, and Sharq in Saudi Arabia.
• PlasChem and Vlaue Parks in Jubail for plastics conversion industries and light
manufacturing industries was set up
• Sadara Chemical Complex – this complex will produce LDPE using Dow’s
technology

2. Singapore
One of the success factors for Singapore is Jurong Island Chemical Hub. The island was formed
through land reclamation. It was a combined effort of various government agencies like the
Economic Development Board and JTC Corporation. About 90 international petroleum and chemical
companies are in Jurong Island Chemical:
(a) Shell opened its 750 000tpa mono ethylene glycol plant
(b) Exxon Mobil has a second world-scale 1,000,000tpa ethylene cracker
(c) Sumitomo and BASF are also located here
The Hub is successful due to the following reasons:
(a) Effective utilization of land space
The close proximity of each plant enables good control of logistics costs. The output from
one company can be used as the raw material for another company. There are also common

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 pipeline transfers made available whereby plant-to-plant transfers becomes simpler and more
cost effective. Underground storage helps companies to free up space for more processing
activities. This has attracted more foreign investments.
(b) Adaptability and flexibility
Singapore has attracted specialty chemical investments due to its intellectual property
protection laws and skilled labour availability
(c) Singapore’s Research and Development (R&D) center
The Institute of Chemical and Engineering Science (ICES) collaborates with many companies
on research and development including Japan’s Mitsui Chemicals. Mitsui has also set up an
R&D center in Singapore. This is the first research center that Mitsui has set up outside of
Japan. Companies incurring R&D costs would qualify for a tax reduction.

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CHAPTER 3 - CONCLUSIONS
SUMMARY OF MAIN FINDINGS/INSIGHTS & SUGGESTIONS

The production of plastics is very much dependent on the price of crude oil because crude oil is one
of the main raw materials used to produce plastics. When the price of crude oil increases, the cost of
producing plastics increases as well, thus affecting the total production and the total export of
plastics. When the price of crude oil decreases, the cost of producing plastics reduces, thus causing
producers to produce more as demand increases. However, if uncontrolled, there will be a risk of
overproduction and high inventories. The cost of purchasing virgin resins becomes cheaper than the
cost of recycled plastics resins when the price of crude oil drops. Therefore, countries like China that
imports a lot of plastics wastes will become burdened with a surplus of wastes. To overcome this
problem, China should work on reducing the costs of manufacturing recycled plastics so that the
demand for recycled plastics will not be affected when price of crude oil drops.

Germany and the US were the top exporters of plastics in the world. However, from 2013 onwards
China has started exporting more plastics than the US and in the year 2015, China exceeded the total
export value of plastics by Germany. By doing this, China has now become the world’s number one
exporter of plastics. China has the absolute advantage over US and Germany for producing and
exporting plastics. Some of the factors contributing to this is cheap and abundant labour, higher
usage of recycled material thus reduction in processing costs and the increase of demand from other
key end user industries. According to Leontief, US is a capital-abundant and labour-scarce economy.
Therefore, US and Germany should focus on research and development of biodegradable plastics or
other alternative materials that can substitute all the characteristics of plastics. The newly developed
biodegradable plastics or alternatives to plastics will be capital-intensive goods.

The United States of America and Belgium used to be the highest exporter of polymers of ethylene,
which is one of the highest product categories, being exported under the Plastics and Articles thereof
product code. From 2009 to 2017, Saudi Arabia has exported more than the US and Belgium.
Singapore on the other hand has exported almost the same as Belgium in 2017. We can see a
similarity between Saudi Arabia and Singapore in their efforts to increase the total export of
polymers of ethylene. Both countries have invested in high technology petrochemical complexes that
has drawn many renowned companies to set up their factories there. This has boosted the production
and the export of polymers of ethylene in both countries. Saudi Arabia’s step to diversify their
product range is in line with Heckscher-Ohlin’s Theory. Saudi Arabia has a comparative advantage
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in producing products that intensively use crude oil and natural gas, a factor of production that Saudi
Arabia has in abundance. The step taken in diversification of product types by Saudi Arabia, proved
successful when we look at the increasing trend of total exports of polymers of ethylene.

The future of plastics still looks positive. However due to increasing concerns on environmental
issues such as land and water pollution from plastics wastes, it is highly likely that research and
development into biodegradable and alternative materials will be increased especially in countries
like Germany and the United States of America.

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impact-petrochemical-investment-strategies.html
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y=#
Le Guern, C. (2018, March). When The Mermaids Cry: The Great Plastic Tide. Retrieved from
Coastal Care Website: http://plastic-pollution.org/
PlasticsEurope. (2018). Home: About Plastics. Retrieved from A PlasticsEurope Web site:
https://www.plasticseurope.org/en/about-plastics
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TradeArabia News Service. (2015, January 11). Saudi plans big role in global plastics exports.
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http://www.tradearabia.com/news/OGN_273069.html
Veris Consulting, LLC. (n.d.). PLASTIC RESINS INDUSTRY HIT HARD BY. Retrieved from
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Total words: 4332

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