There is increasingly a view across the recycling market that prices are set to fall.
Will that be this week? Possibly, but probably not.
If anything, this week looks set to be relatively stable.
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Will recycled paper prices fall this week?
The 100% inspections that will be required at the loading site for material destined to China has not been imposed as yet by CCIC.
While rumoured implementation of 18 June and 22 June are not true (1 June remains the actual implementation date), there is a grace period being introduced because CCIC just don’t have the resources to introduce 100% inspections as yet.
How long this period will last remains to be seen, and it could be instantly switched off.
For the Chinese buyers, it is largely business as usual, and they are shipping material to China as long as it meets specification. With 50% inspections of UK and European material, this is a critical requirement for them, which is why they should continue to pay a premium in the coming weeks.
However, beyond that, increased inspections are likely to see increased costs, and this should see prices ease off. What might balance that out is that the Chinese mills remain hungry for material, although with local prices in China easing off, they might not be quite so prepared to pay these current prices.
For other destinations such as UK domestic mills, Europe and other Asian destinations, the appetite hasn’t been there to match the Chinese and doesn’t look set to be this week for OCC.
Mixed appears to be a different matter though, and despite last week’s price rise following increased demand, we should see UK and European interest for this grade continue to rise, especially as it is partly supported by an increasing PRN value for paper.
News & pam also saw a price rise last week on the back of demand, but the market feels this grade is largely at its price level, and any further rises look likely to be muted.
More of the same for recycled plastics prices
There doesn’t look to be any momentum that will drive plastic grades higher this week, despite recent increases for the best quality packaging grades.
Over the past couple of weeks, there has been some restocking going on from UK and European buyers particularly, building stocks ahead of the upcoming slowdown over the summer months.
As we get into July, this should start to ease and the result is likely to be a small easing off of prices too. But there is nothing dramatic expected.
One factor that could have an impact will be the ability of sending material to other Asian destinations, with markets increasingly difficult to find. Low quality film grades are most likely to be affected, but even 98/2 could struggle if destinations such as Vietnam remain effectively closed, while Malaysia will have the pick of the best material unless it too implements import restrictions.
Trumps tariffs to continue to hurt scrap metal prices
Tariffs on metals by the US Government, and retaliation from China and the EU has hurt the scrap metal market. Prices in recent weeks have been relatively good, but they appear to have reached their limit for the time being, and price stability or falls seem most likely
Recycling forecast prices
Our algorithm is predicting these prices for key grades this week:*
Forecast prices One week Four week
OCC £110-114 £110-114
ONP £96-100 £96-100
Mixed £26-30 £26-30
PET £248-254 £248-254
HDPE £449-455 £449-455
LDPE £258-264 £258-264
*REB Market Intelligence provides forecast prices and market analysis as a guide only, and Hanicke Robins Sanderson cannot be held responsible for any commercial decisions based upon this data or analysis