It seems to have been one thing after another recently, causing much concern across many business and supply chains.
First it was Covid, then came Brexit, then came driver shortages, followed by a ‘fuel crisis’ and now we are facing energy price increases.
The positive, after all these issues, is that our sector is an incredibly resilient and resourceful one, and while many have not overly thrived in this period, they have survived. This has been reflected in the recent monthly reprocessing figures, with every material exceeding their monthly run rate needing to comply.
Similar story to last month, on the demand side, for OCC material still being high, as long as it can be collected.
These collection challenges have been reflected in the figures, with a ‘quiet’ month for paper, down to 296,000 tonnes reprocessed. As mentioned, this is still way above the monthly processing needed to comply and as such we have more than likely complied at the time of writing this. This is being reflected in price, which has now reached 50p and dropping.
Looking forward the good news is that this bodes well for 2022, with large volumes of carry forward forecast, as the wood volumes fill up the general obligation, meaning less reliance on paper. This will mean a good start into 2022, which should keep the prices relatively low and stable for the year, especially with rumours of China opening back up soon, potentially increasing the volume of PRNs produced. (Editor’s note – while there are rumours in the industry of China opening back up, there is currently no evidence to suggest this will happen anytime soon if indeed at all).
Plastics have bounced back after the sustained decrease in monthly reprocessing figures, increasing by 21,000 tonnes from last month and 36,000 tonnes on last year, to 91,000 tonnes. This has meant a price crash down to £35, as I write this, after spiking up to £52 at the end of September. While plastic remains on course to comply, it is always a bit later than the other materials, so will more than likely be there late November or early December. Price will continue to drop in line with this.
Aluminium prices have continued to drop and are trading around the £4, after an increase in volumes on last month and last year, up to 14,000 tonnes. At the rate we are progressing, aluminium will fall into the general pot as it did last year, but much earlier in the year, with compliance likely in mid-November.
Steel is following a similar path, with a very strong month of processing up to 60,000 tonnes, which has been reflected in a drop in price to nearly £5. Again, looking likely that we will comply by mid-November in steel too.
Glass remelt appears to be coming back into balance, after 140,000 tonnes processed in the month. This is up from last month by 58,000 tonnes. In total we are about 27,000 tonnes ahead of where we were this time last year, indicating we are much better placed to comply that previously thought. High prices should begin to fall, as the current price of £50.50 is nearly 3.5 times more than it was this time last year, even though we are in a much stronger position this year, figures wise.
Wood has had an increase in the month, but this lends itself to filling the general pot. If wood continues to keep producing at its current rates, it will fill the general pot which will mean other materials won’t be needed and as a result push the majority, if not all, December material into 2022.
Ben Richardson is director of procurement at Valpak
