BIR report warns of continued volatility in secondary commodity prices

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A report put together for the BIR has warned that prices are likely to remain volatile for recyclate and called for more transparency to combat it.

Professor Philippe Chalmin of the Paris-Dauphine University put together the second survey for the BIR on the world markets for recovered and recycled commodities, which was launched at the BIR convention in Munich last week.

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The report, World Markets for Recovered and Recycled Commodities 2011 – the End of the Waste Era, identifies China as key to the development of markets for recyclables, and particularly for paper and non-ferrous scrap. However, it warns that at some point China will face an economic crisis, and that both primary and secondary markets will feel the effect.

Professor Chalmin added: “Never have the prices for scrap and old paper been so unstable, which explains the development of new derivatives markets.

“This is, of course, a challenge for the recycling industry to manage long-term policies of collecting waste and making it an ‘urban mine’ in a context of world markets that are more volatile than ever. This is one of the reasons why we shall need more and more transparency on prices and data – a goal which is at the core of BIR’s future development.”

BIR president Björn Grufman said: “Professor Chalmin’s report notes that growing market volatility leads to greater commodity market destabilisation, something which BIR has long stressed can be combated through increased transparency on prices and more comprehensive data.

“A major challenge for BIR and officials throughout the world in 2012 will be to collect more data concerning the capabilities of the ‘urban mine’… so that we can deploy these resources efficiently.”