Shouldn't "tio" be "tiu" in this sentence due to the sentence coming of as one talking about something that the speaker and the other party are both aware of?
I think you have to use "tio". You would use "tiu" if there were several things and you would point one of them saying: but this one (contrary to the other ones) is only a piece of plastic!
Mi bone legis vian kurseron pri "peco de" kaj "peco da" sed en la supera kazo, mi emus diri "peco el plasto" ĉar la peco estas farita el plasto. Ĉu "el" estas eraro ĉi-tie?