Recycling market commentary: 23 March 2018

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There has been some recent increases in the price of plastic grades as the market has heated up with material able to move.

But the expectation is that these price rises are temporary and the market is set to fall from late-April into May.

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Otherwise, paper grades saw minor changes, while metals saw some drops on the LME.

With Easter holiday season now upon us, there isn’t much optimism that things will improve over the coming weeks, but there isn’t too much fear that things are about to get worse.

Easter is also a time when more material has traditionally been placed in the market due to increased holiday time and two bank holidays leading to more shopping. So there will be some anticipation to see whether this happens, and if so, what the impact will be on the market.

The value of sterling has increased this week to reach $1.41 at the time of writing compared to $1.39 last week, while against the euro it is now €1.14 compared to €1.13 last week.

This was aided by the Bank of England hinting that interest rate rises were on the way, possibly in May. While the European Union and the UK Government also appeared to agree to a transition deal for Brexit, which also boosted the market.

However, the effect of this, is to make UK material more expensive, and the FX boost that came after the referendum vote has mostly been lost now.

Plastics

Material is continuing to move and demand appears to have picked up in recent weeks.

Interest in PET has been boosted by domestic and European demand in particular ahead of the summer season.

As a result, this grade is back above the £200 level again.

HDPE bottle demand has also improved, while LDPE film has also seen more interest from buyers in Europe and the likes of Malaysia, India, Indonesia and Vietnam.

PP and HDPE Regrind in particular have got hot, and the market for these looks very good at present.

However, there are warnings that this may not last, and some are predicting that the PRN price may slump in May if the data proves to be positive for the first quarter of 2017. With the PRN supporting the physical price, this could lead to a sharp price decline.

The other fear is that with these non-China Asian destinations snapping up material at present, they will get full as they did in the early part of the year. Feast then famine appears to be the purchasing pattern rather than steady.

See plastic pricing data at the bottom of the page here

Paper

After a brief bump last week, news & pam recovered back up to the levels it had been at previously.

With OCC, Chinese buyers are waiting to see if they are going to get more import quotas so are being cautious, and overall the price eased back slightly by £2 per tonne.

The view though is that prices may start to ease upwards gradually over the next few months, as the Chinese mills also become clearer over the inspection regime.

Domestic and European demand is okay at present, and there are some signs they remain happy to take mixed paper.

See paper pricing data at the bottom of the page here

Metals

Copper, brass and aluminium grades all fell back this week, but steel cans increased by £10 per tonne.

See metal pricing data at the bottom of the page here

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