Secondary Markets Commentary – 9 March 2018

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Material is moving, but market continues to be in winter with no signs of spring emerging as yet

It has to be said that the market is working at the moment in the sense that people are generally finding outlets for material, even if they are having to suffer low prices to shift it.

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But the market remains in hibernation, with it generally reported that conditions are quiet.

With some wintry weather in parts of the country yesterday, this also had a temporary effect on collections, meaning that material that wasn’t collected last week is still to emerge onto the market.

As yet, there is little sign that the market will open its eyes, stretch out its arms and emerge from the slump it has suffered across the winter.

However, over the coming weeks, the pattern of the market should remain clearer, and as we get closer to Easter, and then closer to summer, we might also see more activity as material becomes available, and possibly demand for that material improves.

In terms of factors on the market, sterling was barely unchanged against the dollar compared to last Friday bringing some stability to international prices at least.

The traditional difficulty of getting containers after Chinese New Year has not happened this year, making life easier for those who are exporting to China, and to a degree elsewhere. If anything, shipping lines are competing for business.

Plastics

There isn’t a lot of plastic on the market at the moment, and people are starting to compete for tonnage for certain grades – packaging ones in particular with the exception of film.

Demand has improved slightly on the export market into Europe, with some Asian countries also interested in purchasing again.

Film continues to struggle but there are some indications of interest again from non-Chinese Asian countries as they exhaust previously purchased inventories.

This looks set to be a pattern where these countries gorge then diet, rather than the consistent purchasing patterns previously seen with China. Of course, this is also dependent on whether prices are attractive to them.

Industrial grades have also seen a little more interest, but prices across the board are broadly unchanged.

See plastic pricing data at the bottom of the page here

Paper

There was a little more interest in OCC this week with at least one of the Chinese buyers showing a bit more interest to put the price up by a couple of quid.

With the 0.5% limit now imposed on exports to China, officials there are inspecting containers with some being rejected, and some accepted. However, tape and staples are not being included in this limit.

Chinese buyers are also waiting for new import quotas to be given to the mills they supply, and it is hoped now that Chinese New Year is over, and the opening of the 13th National People’s Congress has been completed, that officials will go back to their departments and introduce improved quotas.

Mixed paper is moving well into Europe, Indonesia, and India in particular. UK mills have also been buying.

The extremely low price of mixed in the UK (in some cases being offered for free), and improving quality of the grade, has meant UK material is often much better value than local material. It might be cheap, but it is moving.

See paper pricing data at the bottom of the page here

Metals

The main change this week was a £15 per tonne increase in steel grades, including for cans. However, with US President Donald Trump managing to impose tariffs on imports of steel and aluminium, it is expected that this will have an effect on prices of those materials over the coming weeks. The expectation that this will lead to more supply of material on the market that would previously have gone to the US, lowering both steel and aluminium prices. We will have to wait and see if it does.

Otherwise, the metals market was pretty quiet this week with no other real changes seen.

See metal pricing data at the bottom of the page here

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