Zhongjin: Policy Promotes Development of Biodegradable Plastic Industry, PLA and PBAT Prices at Historical Lows

CICC released a research report with the main points as follows:

Policy promotes the development of the biodegradable plastics industry.

Since the National Development and Reform Commission and the Ministry of Ecology and Environment issued the "Opinions on Further Strengthening the Governance of Plastic Pollution" in 2020, various provinces/regions and industries have successively released relevant implementation opinions, plans, or measures for plastic pollution. If the relevant policies are implemented, it is expected to drive a rapid increase in the demand for related biodegradable materials, such as biodegradable plastics. CICC believes that biodegradable films and express packaging may become the main areas for the future application expansion of biodegradable plastics.

The utilization rate of PBAT capacity is low, and the price is at a historical low.

According to Baichuan Yingfu, the PBAT production capacity in 2024 is expected to reach 1.37 million tons, with a CAGR of 53% from 2021 to 2024. Due to demand being lower than expected, the average operating rate of PBAT is projected to be 15.8% in 2025. As of September 21, 2025, the market average price of PBAT is 9,850 yuan/ton, which is at a historical low. The average operating rates for raw materials BDO, PTA, and AA in August were 45%, 74%, and 53%, respectively. It is expected that PBAT prices will continue to maintain a slight fluctuation at the bottom, primarily supported by costs in the short term.

Short-term supply and demand disruptions in the PLA market put pressure on product prices.

In the first half of 2025, the export of downstream PLA products was significantly affected by tariff policies. Additionally, due to the less-than-expected enforcement of plastic bans and consumption downgrades, traditional PLA application areas such as straws and disposable tableware experienced a slight decline. According to data from Baiinfo, the average market price of PLA has been continuously declining since 2021. As of September 21, 2025, the average market price of PLA stabilized at 17,200 RMB/ton, representing a 1.7% decrease compared to the beginning of the year and a 42.7% drop from the peak in 2021.

In terms of the subject matter

The companies related to the biodegradable plastics industry chain include PBAT: Kingfa Sci & Tech Co., Ltd. (600143.SH), Changhai High-Tech (605008.SH), Hengli Petrochemical (600346.SH); PLA: Zhejiang Hisun Biomaterials Co., Ltd. (688203.SH), Jindan Technology (300829.SZ), Lianhong New Science & Technology (003022.SZ); Raw material adipic acid: Huafeng Chemical (600426.SH) and Huafeng Chemical (002064.SZ), BDO: Sanwei Co., Ltd. (603033.SH) and Zhongtai Chemical (002092.SZ).

Risk factors

Policy implementation fell short of expectations, and product prices continued to decline.