The Recycling Association has urged waste producers to temper expectations on how much value they can get from recyclable commodities in 2015.
Against a background of falling commodity prices and increased costs, businesses and organisations such as retailers and local authorities are being warned to be pragmatic in their expectations.
Secondary Commodity Markets 2015 – the conference for buyers and sellers of recyclable materials takes place on 3 March 2015 in London. Find out more here
The Recycling Association chief executive Simon Ellin (pictured) said: “The recycling industry is a very good indicator of how the economy is doing because we are dealing in waste products produced by businesses and the general public and, in a recession, the public cut down on their purchasing and so businesses have to curtail their production. This impacts right the way through the supply chain from packaging to marketing materials.
“If the public are not buying and the mills are not producing, demand becomes weak and prices fall. This is very much the case now and although we have experienced some recovery over the past two years, the economic improvement forecasts fed to us by the Government are simply not filtering their way into the recycling industry.
“At the same time as commodity prices are falling, the costs incurred by paper and plastics merchants at depot level are rising – we are seeing increases in business rates, insurance, labour and red tape such as driver CPCs, site licensing and general compliance.
“It is very important that producers such as retailers, manufacturers, printers and local authorities manage their expectations accordingly. There is simply not the revenue rebates to be gained from the sale of recyclables that there were even 12-24 months ago. Like any business, the collection and processing of recyclables has to be sustainable and a partnership approach must be adopted which reflects the true costs of the whole recovery system.
“We have a fantastic industry and its evolution in the UK is something we are rightly proud of. However, we are in a commodity market and, as such, prices will fluctuate. We urge a sensible and pragmatic approach from waste producers to assist in sharing the burden in the difficult times as well as benefitting in the good times. By doing so, we can ensure a bright and sustainable future.”
The Recycling Association president Adrian Jackson added: “The recycling industry in general is being forced to evolve and adapt as the demand from the Far East has weakened. This is in part due to the lack of demand for consumer goods from Europe.
“The poor European economy is a well published fact and that has resulted in lack of demand for waste from European Paper Mills. In November, we have seen the fall in prices of most grades of between €10 to €20.
“As we approach the Christmas holidays, I can envisage a situation where a lot of mills will close earlier than normal and take down time in order to take finished stock out of production. Furthermore, the same factors are affecting the plastics industry, and allied to low oil prices, there is tremendous downward pressure on prices being paid for plastics for recycling.”