Ben Richardson on the PRN market: June 2021

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Ben Richardson Valpak

In the last month, all the market has been talking about is plastics and Turkey. As reported by REB Market Intelligence, there have been changes in what Turkey is happy to accept and in what form. These changes have impacted the market and have begun to be reflected in the monthly figures for May for plastic, although UK compliance still remains on course for plastic. All other material streams, including paper, are steady and the majority are now on the decline, value wise, due to the overall positive position the UK is in for complying.

When the news broke, that Turkey was banning PE bales into the country, the PRN on plastic doubled in the space of two weeks, from £65 to £130, at the end of May. As we hit June however, the price crashed within the first week back down to £85 and has steadily traded since then. It appears like both buyers and sellers are happy to move material at this price, albeit this will slow in the last couple of weeks in June just to availability. Let’s not forget that in 2020 plastic prices were around £150 and in 2019 £250.

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The monthly figures showed the expected dip in plastic recycling, around 29,000 tonnes from the previous month and 14,000 tonnes compared to this time last year, due to new routes and arrangements being made for originally Turkey bound material. This doesn’t hinder the projections, based on a strong year so far, of easily meeting compliance. It will of course be interesting to see how the value of material changes in the coming weeks, with the Turkish recyclers previously driving up the market by paying a lot more to encourage material in, while the value of recycled plastic remains high.  

With India opening up its doors in recent weeks, we saw the value of cardboard spike back up again, after the trickling down in value. This is even better news for the PRN market, as material was still flowing in strong numbers without India. While this opening isn’t reflected in the monthly figures, as these are based on May, paper PRN generation was still maintaining strong outputs, with a small increase of 1,000 tonnes compared to last month. With paper PRN generation already very strong, combined with the opening of India, we can expect the price to fall away in the coming weeks as supply far outstrips demand. It has dropped by about 50p over the past four weeks and will probably fall away by another 50p or so in the next four weeks.

Generally aluminium, steel and wood prices have dipped over the month, due to the positive figures and abundant supply of material. Glass is proving a slightly more challenging market, pricewise, due to the changes in targets last year putting some pressure on it. All the analysis states we should be complying, but that is not reflected in current prices.

Ben Richardson is director of procurement at Valpak

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