CICC released a research report stating that since 2020, when the National Development and Reform Commission and the Ministry of Ecology and Environment issued the "Opinions on Further Strengthening Plastic Pollution Control," provinces/regions and industries have successively released relevant implementation opinions, plans, or measures regarding plastic pollution control. If these policies are implemented, they are expected to drive rapid growth in demand for related biodegradable materials such as biodegradable plastics. As of September 21, 2025, the average market price of PBAT was 9,850 yuan/ton, at historical lows. Raw materials BDO, PTA, and AA had average operating rates of 45%/74%/53% respectively in August. It is expected that PBAT prices will continue to maintain slight fluctuations at the bottom, primarily supported by costs in the short term. CICC's main viewpoints are as follows:
Policy Driving Biodegradable Plastics Industry Development Since 2020, when the National Development and Reform Commission and the Ministry of Ecology and Environment issued the "Opinions on Further Strengthening Plastic Pollution Control," provinces/regions and industries have successively released relevant implementation opinions, plans, or measures regarding plastic pollution control. If these policies are implemented, they are expected to drive rapid growth in demand for related biodegradable materials such as biodegradable plastics. CICC believes that biodegradable agricultural films and express packaging may become the main expansion directions for biodegradable plastic applications in the future.
PBAT Capacity Utilization Rate Low, Prices at Historical Lows According to Baiichuan Yingfu, PBAT capacity reached 1.37 million tons in 2024, with a CAGR of 53% from 2021-2024. Due to lower-than-expected demand, the average PBAT operating rate in 2025 was 15.8%. As of September 21, 2025, the average market price of PBAT was 9,850 yuan/ton, at historical lows. Raw materials BDO, PTA, and AA had average operating rates of 45%/74%/53% respectively in August. It is expected that PBAT prices will continue to maintain slight fluctuations at the bottom, primarily supported by costs in the short term.
PLA Market Faces Short-term Supply-Demand Disruptions, Product Prices Under Pressure In 1H25, affected by tariff policies, PLA downstream product exports were significantly impacted. Due to plastic ban enforcement falling short of expectations and consumption downgrading, traditional PLA application areas such as straws and disposable tableware also experienced slight declines. According to Baiichuan Yingfu data, PLA average market prices have continued to decline since 2021. As of September 21, 2025, the average market price of PLA stabilized at 17,200 yuan/ton, down 1.7% from the beginning of the year and down 42.7% from the 2021 peak.
Related Companies Biodegradable plastics supply chain related companies include PBAT: Kingfa Sci.&Tech.Co.,Ltd. (600143.SH), Ningbo Changhong Polymer Scientific And Technical Inc. (605008.SH), Hengli Petrochemical Co.,Ltd. (600346.SH); PLA: Zhejiang Hisun Biomaterials Co.,Ltd. (688203.SH), Henan Jindan Lactic Acid Technology Co.,Ltd. (300829.SZ), Levima Advanced Materials Corporation (003022.SZ); Raw material adipic acid: Shandong Hualu-Hengsheng Chemical Co.,Ltd. (600426.SH) and Huafon Chemical Co.,Ltd. (002064.SZ), BDO: Sanwei Holding Group Co.,Ltd. (603033.SH) and Xinjiang Zhongtai Chemical Co.,Ltd. (002092.SZ).
Risk Factors Policy implementation falling short of expectations, continued decline in product prices.
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