Ben Richardson on the PRN market: July 2021

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Ben Richardson Valpak

Turkey and India remain the hot topic for everyone at the moment who is looking to move material and generate those all-important PRNs.

India seems to be winning the battle against Covid, and continues to be hungry for OCC, while Turkey has done a u-turn and will accept PE based material again, as reported by REB Market Intelligence.

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The monthly figures were released last week and were a ‘mixed bag’.  Overall, they have not negatively impacted the overall Q2 position, which remains positive for compliance for the year. Paper, steel, and aluminium all increased in volume for the month, while we saw some decreases in plastic, glass and wood.

Plastic volumes decreased again for the month, by about 14,000 tonnes, as people continued to look for homes, for their previously Turkey-bound material. As mentioned, our year-to-date position remains strong with volumes being 8,000 tonnes up from this time last year, which was a very strong year in itself. But with the news of Turkey reopening, we should expect to see a strong Q3 volume-wise and a reduction in PRN price as a result. Since last month there was a small increase, up to £100 per tonne, at the end of June, before gradually reducing to the £65 mark it is at today. With all the positive news for the year, backed by a strong carry-in, compliance in plastic should be easily obtainable.

Value for OCC remained strong from all countries, especially for India, which in part helped PRN generation increase by 105,000 tonnes for the previous month and a whopping 187,000 tonnes up from this time last year. These volumes look as though we could have the strongest quarter for paper PRNs since 2016. As a result, compliance for paper, should occur in Q3 meaning a large volume for general recycling and paper carry-forward into 2022 as a result.

Price-wise paper PRNs have lingered around the £2 mark but are still yet to drop off. With all the aforementioned positive news it seems almost impossible, apart from a huge change in the market, for the price to remain at £2 and it should fall away into Q3.

Aluminium prices have crept up by £1 or so in the past 4 weeks, while it has had another strong month of reporting. Steel has also crept up ever so slightly, alongside a slightly worse performing month. Wood and glass have both seen decreases in price, with decreased monthly figures, but all materials will comply, some in Q3.

Ben Richardson is director of procurement at Valpak

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