Recycling Market Commentary and Prices: 1 June 2018

There has been a lot going on this week that could fundamentally affect the UK recycling market.

For a start, there was the announcement that China will enforce 100% inspections on those materials that are still allowed to be exported there. This is likely to mean delays in exports and may lead to a cooling in Chinese interest for the foreseable future.

Vietnam is also placing restrictions on imports to its ports until October. With Vietnam an increasingly important destination for plastics and paper, this could also mean there is less interest from this market in the coming months.

It is also rumoured that Malaysia is looking to do something similar as it struggles to deal with all the material that has been sent there in recent months.

While Poland has also vowed to take action against all the material sent there as a result of the China ban, and the resultant fires it has seen.

We’ve also seen Nine Dragons buy two US paper mills and Lee & Man look into building a mill in Myanmar as the Chinese mill groups increasingly seem to be looking for opportunities outside of China.

While many people have been on holiday this week due to a bank holiday and school half-term, it has felt like a week that shows the big changes occurring in the global recycling market.

At least other conditions were more stable, with the pound trading at roughly the same $1.33 as it was this time last week. The pound against the euro briefly saw €1.15 before settling back down below €1.14 just slightly below where it had been last week.

Shipping costs to the Far East have also increased for June by over $100 per container depending on the volume of the supplier due to fuel surcharges, but this had already been signalled in previous weeks.

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Plastic

Price increases were seen in packaging grades this week on the back of more demand. With virgin PE prices rising, this has also increased the price of the secondary material too.

In the case of PET, there has also been an increase in the cotton price in the last week, which may see more demand for artificial fibres.

As a result, PET and HDPE prices were up by £10 per tonne each, while the top end film grades saw a £30 per tonne increase.

The situations with Poland and Vietnam though, as mentioned above, could have a fundamental impact on the market and may hit demand for materials.

Paper

Prices were stable this week, although the expectation is that Chinese buying patterns for OCC may start to soften.

The 100% inspections mentioned above are likely to cool Chinese demand as they assess exactly what it means for them, while the increased cost of shipping is also likely to have an impact.

With the US now also moving material, but the UK price still higher than the US, OCC from here is starting to look expensive to the Chinese mill groups. However, they will continue to pay a premium for the highest quality material. This week this was anything up to £155 per tonne.

UK mills are also reported to have stepped up, getting closer to the China price as they seek to ensure they have stocks in their yards. Other non-China destinations are still in the £70 to £80 range.

News & pam and mixed papers were unchanged this week.

Metals

Only stainless steel really changed this week in what was a relatively stable, and therefore unusual, market.

Prices

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