Ben Richardson on the PRN market: May 2021

Ben Richardson Valpak

Since my last report we have seen monthly figures, quarterly figures, and a few finger fudges along the way.

The figures, combined with cooled demand on cardboard and sustained demand for recycled plastic, are setting the market up for a turbulent few weeks when it comes to PRNs, with the global influencing factors moving around so much.


Starting with the quarterly figures, which showed us what the market was expecting, materials continue to move in a positive direction to comfortably meet our recycling targets. All materials, apart from wood, performed better than Q1 2020. Apart from wood bucking the trend, there was also an issue with the plastic figures when they were first released. ‘Other plastic packaging’ showed a higher gross received versus the net received, which created a bit of a stalemate in the market, until it was resolved. Buyers were encouraged by the figures, but reprocessors wanted to see what the true figures looked like, before looking to move PRNs. The good news is the figures were rectified at the end of April, and remained positive, which subsequently resulted in the expected price drop from £80 down to £60.

At this point it is also worth noting that the amount of PRNs that were not issued in 2020 demonstrates that the carry in for 2021 could have been much stronger than it was, especially for aluminium, which would have made it even easier for the UK to comply this year, as shown in the table below.

Glass Other5,185
Glass Re-melt641

More recently we have had the monthly figures, which showed a strong month for reprocessing, with only paper and glass remelt figures being worse than last year. Counter to that though, overall paper is performing well, and glass remelt is up from the previous month.

Focussing in on cardboard, the trend for the value of the material is downwards, as reported by Chris Burton, and the PRN is also following that move. The quarterly figures were the strongest Q1 figures we have had since 2016, mainly driven by the export market and while the monthly figures were 56kt down compared to this time last year, we are 85kt ahead in our YTD position versus last year.

All this points towards easily meeting paper targets and hugely supporting the general pot. The impact of these figures, and the focus in fulfilling demand from the mills over the past few months, has meant the price has slowly trickled downwards, with prices today sitting at £3. This is a reduction of £2.50 since May, with little sign of the price drop halting.  

Plastics had the aforementioned issues with the figures in the quarterlies, but overall, the position remains strong, with Q1 having the highest volume of UK reprocessing ever by 5kt.

Monthlies also remained positive, with figures showing a 10kt increase compared to this time last year. This has had little very little impact on the price though, with it bobbling around the £65 mark and while demand remains high for recyclate compared to the virgin prices and as such the price less reliant on the PRN price support function, it will only be a matter of time before the price drops.

There are also the reports of issues with exporters not abiding by the Turkish regulations, meaning more containers are being checked by the EA and possible cancellations, but it is early days in this saga and we are yet to see the UK obligation which could make things a lot easier.

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