Ben Richardson on the PRN market: January 2021

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Ben Richardson Valpak

The start of 2021 has been edged with much concern with Brexit, Covid, Basel Convention and general changes in localised laws, around the movement of recyclate around the world. So far it appears as though everything is still moving, maybe slower or later but moving, nonetheless.

Alongside these challenges the Environment Agencies remain busy implementing stricter and more detailed 2021 accreditation processes, to combat fraudulent activity, which is welcomed by the legitimate industry stakeholders.

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Hopefully this focus will represent a much fairer, and truer, reflection of the packaging recycling system – something that is overdue. While the stricter processes may see several businesses decide it is too much hassle to become accredited, in the short term the movement of material and the subsequent issuing of PRNs, means the outlook is positive for the industry at the start of the year.

Staying with 2020 for now (sorry I know people want to move on from ‘that year’),the compliance year remains open to trading for anyone who has any PRNs left to issue and it appears as though the direct registrants are actually keeping that market alive.

While paper has been trading around 75p for a few weeks it has spiked to £4.95, as this will appear good value compared to 2019 prices for businesses outside of the industry. The price is now gradually reducing, as the demand disappears and will continue to decline.

For plastic in 2020, it is now trading at £35, but doesn’t appear to be reducing as quickly as paper, meaning there is still obligation to meet in plastic for 2020 for schemes or direct registrants.

Similarly, to paper the price of £35 represents very good value compared to the 2019 prices, so direct registrants will be happy to pay that price. These increases have been seen across all the other material streams with aluminium, steel and wood all drastically increasing at the start of the month. 

Looking forward in to 2021 all the focus remains on plastic and the new laws around shipping plastic out of the UK.

This has created a fear factor in the marketplace that there will be a shortage of plastic PRNs as a result, which has seen the price steadily climbing to £115, as I write this.

While there is a slowdown of material movement, as mentioned earlier, this will not impact the UK meeting its overall recycling targets. As a result, it will only be a matter of time, most likely when the quarterlies are issued, that the price will begin to deescalate as those fears ease.

Paper prices for 2021 are staying steady and remain similar to what we saw for large parts of last year, £6.50 – £7. This price is obviously working for all parties involved at the moment and as demand for raw material increases, due to mill outputs, the value of that material will increase. Realistically the PRN will hold, even drop slightly, as the PRNs flood the market in Q1. 

Ben Richardson is director of procurement at Valpak

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