Recycling Market Commentary: 27 April 2018

There is a little bit more optimism in the recycling market this week.

As we head into May, there is a view that things may get slightly better, or at least stay as they are.

There isn’t a sense that prices are set to fall, as the market fundamentals are generally in favour of a price increase.

In paper grades, OCC was the only mover this week, moving up just a touch. While for plastics LDPE 98/2 gained a bit as well. Metals were largely stable apart from Brass.

After looking like it was going to return to the sorts of levels seen prior to the Brexit referendum in June 2016 just two weeks ago, the pound has slumped today.

At the time of writing the pound was trading against the dollar at $1.37 down from $1.40 last week. This is due to UK GDP growing by just 0.1% in the first quarter of the year, prompting fears that interest rates now won’t rise. This compared to 0.4% GDP growth in the final quarter of 2017.

Against the euro, the pound was stable on this time last week at €1.14, although has late as yesterday it was trading at €1.15.

However, a lower pound benefits exporters, and those who are able to shift material will find that their material is more competitive on the international market now.

In terms of shipping, some are reporting that May containers are coming out priced flat (usually those with the largest purchasing powers), while some are being asked to pay up to $50 more.  Whether they will eventually have to pay is another matter, but rising oil prices are making shipping lines consider whether they can maintain these prices, despite weaker business on the backhaul routes as a result of the China bans.

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Plastics

The main mover this week was LDPE 98/2, which increased by £5 per tonne due to more demand coming from the export market, with support of an increased PRN.

LDPE has been the toughest material to move since the ban on imports of plastics by China. But the material is finding outlets in other South East Asian destinations as a result of Chinese and local buyers shifting their operations from China elsewhere.

Is there much more uplift ahead? It remains to be seen, but those involved in trading film are definitely feeling more confident than they were at the beginning of the year.

Bottle grades remained largely stable.

With the Q1 data now published by the National Packaging Waste Database, the picture for plastics suggested that the UK is largely set to meet its targets. While the PRN price increase a touch, this level is helping to support the market in both the UK and for UK material abroad.

In industrial grades, both HDPE Regrind and PP Regrind prices remain strong.

Paper

The OCC market remains strange and this week was no different. Although it could be said it was less strange than in recent weeks.

While some were able to get above £100 per tonne for OCC from Chinese buyers in particular, this was only for the very best quality (95/5 effectively).

However, these buyers were also paying in the low 90s based on quality and how much they wanted the material.

In recent weeks, Indian and European buyers were holding back by offering as low as £60 to discourage price rises, or to discourage the idea that they wanted to buy. However, they are now entering the market at higher prices, around £70 to £90 for 90/10 depending on their needs.

They are also being driven by a fear that if they don’t buy now, they could end up paying a lot more than this in a few weeks, so are hedging a little by buying now.

There has been chatter in recent weeks that there are effectively two grades of OCC now, 95/5 and 90/10, but this appears to be premature as non-China buyers also don’t want to be seen as the market for ‘cheap crap’ so are increasingly intent on also buying top quality material.

Other paper grades were largely stable, although multi has eased back a touch.

Metals

Brass increased by £200 per tonne in an otherwise stable market for industrial scrap metals.

Aluminium cans have eased back by around £50 per tonne. This is due to falls on the LME, but also a fall in demand as some of the major UK and European buyers has largely been out of the market for a month. However, they are coming back in now and are expected to purchase normally again in May. With lots of material around though, it is unlikely that prices will increase over the next month as buyers have their choice of material.

Prices

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UK plastic bottles

UK HDPE, Wheelie Bins, HIPS, EPS, PP

UK LDPE film

UK pots, tubs, trays

UK OCC, ONP, Mixed paper

UK soft mixed, OIN, SOW

UK Multi, WHL, BW2

UK copper

UK brass

UK aluminium alloys

UK aluminum

UK stainless steel, zinc, lead

UK ferrous

UK engines, cans, plugs

UK glass

PRN paper, plastic, glass

PRNs wood, steel, alu, recovery

UK gate fees, RDF, landfill

UK Gate Fees - EFW, AD, MRF

China plastics

China paper

China metals

US plastics

US paper

US metals