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Prices for secondary commodities falling as less demand and high shipping rates impact on market

Date: Wed, 6 Jun 2012 | Author: Paul Sanderson

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Traders of material are reporting that prices are falling, and may continue to fall, as the world economic crisis continues.

Demand is falling at present from both domestic and export markets, sources have told SCM, and unless there is a sudden upturn in fortune, it looks like this situation will stay for a little while yet.

With the eurozone crisis unresolved, and this beginning to infect other economies, the situation could remain bleak unless global economic performance improves.

Chinese buyers are reported to want to push prices down further as their end markets are starting to stagnate as there is less demand from major economies for their manufactured goods.

But with shipping costs remaining high, there is little willingness on the part of exporters to push down prices further as it becomes uneconomic to trade at lower prices. China is still buying very high quality material, but is being tough with price, but lower quality paper/board and plastic is finding it difficult to find a home.

The current situation is being described as a market correction that has occurred over the past few weeks, as opposed to a big shock in the market.

With the export market currently difficult, this is also putting pressure on the domestic market.

A UK reprocessor told SCM: “I’ve never had so many phone calls and offers of material. I have been inundated with calls. We are staying loyal to our customers though.

“We’ve been living through a bubble market, and are now seeing a correction in the order of 20 to 25 per cent. This is a big drop, but we should remember we are dealing with resources that still have a value. Price falls like this give the domestic market a chance, and I can’t see China coming back as much as before.”

OCC is currently trading in a range of £78 to £88 per tonne, according to our prices, but as recently as March, it was priced at £121 to £128 per tonne.

Natural PET is down to £285 to £320 from the £320 to £355 seen in April. 

The price of dry bright copper wire is down to £3,700 to £4,150. The midpoint in March for this material was £4,375.  

Category: Recycling
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