China's demand is constrained by the government's plastic ban, prompting processors to cut production and traders to take a wait-and-see attitude towards the market.

Market participants said that a total ban on the use of disposable plastic bags will reduce the demand for PE by at least 2-3 million tons, depending on the implementation of policies in various provinces.

The government is moving towards banning the use and production of disposable plastics, rather than just charging fees to limit their use.

China will gradually restrict or prohibit the production, sales and consumption of disposable plastic products in major pilot cities by the end of 2020.

With the promotion of the use of biodegradable and recyclable materials, it is expected to be implemented nationwide by 2022.

According to the documents issued by the national development and Reform Commission and the Ministry of ecological environment, by 2025, China will completely eliminate disposable plastics, and is expected to effectively control plastic pollution, significantly reduce the amount of plastic waste in landfill sites in key cities, establish a sound plastic management system, and promote the development of alternative products.

These sustainable development goals may impact polyolefin demand. PE is likely to be hit hard by its large number of packaging applications, especially HDPE films, which are mainly used to produce plastic bags.