Recycling Market Commentary: 4 May 2018

Clearly, the news that the Chinese Government intends to suspend imports of recycled material from the United States for a month, will have a big impact on the market.

For plastics, it won’t make any difference at all of course, as that material is effectively banned.

But for paper and metal, it will change the focus of Chinese buyers, but also those from other parts of the world too. More on all of this below.

Otherwise, market conditions remain relatively benign if companies can get hold of material.

Shipping prices are mostly flat, although there are some reports of some smaller operators paying slightly higher prices.

The foreign exchange situation is also good for exporters, with the pound at around $1.35 this week, compared to $1.37 a week ago, and $1.42 four weeks ago. This makes UK material cheaper.

Against the euro, it is the same situation with the pound now at €1.13 compared to close to €1.16 a month ago.

While it is hard to get hold of material at the moment, with arisings reported to be low across the board, it is hoped that good weather over the bank holiday weekend will lead to more material on the market.

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Plastic

A glut of material has led to the PET bottle price falling a bit this week losing £15 per tonne. This is partly as a result of the improving weather leading to more material available, but also less appetite from Europe that has stocked up in recent weeks.

The opposite is true with HDPE bottles that gained another £10 per tonne this week as demand improved, aided by the slight increase in the PRN.

With material moving, and the PRN providing support, best quality film grades improved by £5 per tonne. There is demand still from South East Asian markets who are happy to buy at current prices.

Industrial plastics such as HDPE and PP are also in demand and prices remain high.

Paper

As mentioned above, the main factor that is likely to affect the market over the coming weeks is the announcement yesterday that China is to suspend imports from the US for a month.

While there wasn’t time for this to impact too much on this week’s market (although some buyers adjusted prices slightly upwards during the day yesterday), it should start to have an effect next week.

Chinese buying attention is likely to switch from the US to UK and Europe over the coming weeks, especially as quota allocation cannot be filled from US material until at least 4 June.

This is likely to push up prices further as demand from Chinese buyers is likely to be high.

But conversely, Indian and South East Asian buyers are likely to focus on buying distressed tonnage from the US, which is now likely to be cheaper for them.

It will also be interesting to see how UK and European mills respond, as they will know any price rises are likely to be temporary but they may not want to get caught out with low stocks if prices were to keep rising beyond 4 June.

Don’t forget, US material will be subject to 100% inspections beyond 4 June, so there will be more risk involved in buying from there for the Chinese. Certainly anyone buying OCC will be having to weigh up risk a lot more in the coming weeks and months as prices could be quite volatile. Next week should certainly be interesting and may give a better indication.

In terms of this week’s market, there was definitely more demand for OCC from Chinese buyers and the spread between what they were prepared to pay for quality material and others who were less picky, was quite marked. The bottom of the OCC market was in the mid-£70s, but there were reports of up to £120 per tonne being paid by some for the best material.

Most in the market were somewhere between £80 and £110 depending on quality.

Other paper prices were pretty stable.

Metals

Brass grades fell by £100 per tonne due to falling demand, while other industrial metals were largely stable.

With plenty of material available despite buyers coming back into the market, aluminium cans eased back by £50 per tonne.

Prices

To see the full prices including trend charts, please visit here

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