Recycling Market Conditions – looking ahead (19 March 2018)

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Recycling market week ahead
Recycling market prices may change this week

Last week was a quiet one for the recycling market, and there is no reason to expect this week will be much different.

In the paper market, Chinese buyers of OCC are still awaiting the next tranche of import quotas to be issued to the mills, and until they are, they will remain subdued in their purchasing patterns.

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Plus, the Chinese mill groups are risk averse at present, waiting to find out how the new Blue Sky 2018 inspection regime will pan out.

If prices are to change, it only looks like it will be a pound or two difference.

For mixed paper, there is still interest from Europe and India, but the appetite seems to be waning somewhat, yet there isn’t much scope for prices to fall further. So a stable price looks likely for mixed.

News & pam is suffering from a glut of material on the market, but last week’s fall looks unlikely to be replicated this week as it appears to have reached its level.

For plastics, it looks like it will be a stable week with material moving, but there doesn’t seem to be much extra supply or demand set to hit the market to change things.

The price of ferrous metals has been creeping up recently. It is still unclear to what extent the US tariffs on steel and aluminium will have on these ferrous and non-ferrous metals respectively though.

Forecast prices           23 March 2018        13 April 2018

OCC                             £65-69                      £63-67
ONP                             £56-60                      £54-58
Mixed                           £5-9                         £5-9

PET                              £161-165                  £161-165
HDPE                           £371-375                  £368-374
LDPE 98/2                    £171-175                  £170-176

For exporters, there is potential for some volatility in FX rates this week.

First of all, on Thursday and Friday there is a summit scheduled between EU and UK negotiators to see if a two-year Brexit transition period can be agreed beyond the official leaving date in March 2019. The market will be watching this in the hope that an agreement can be reached, and what the detail of the arrangement will be.

If a deal is reached, it is likely to be seen as a positive for the pound, but the opposite can also be seen to be true.

The Bank of England Monetary Policy Committee is meeting this week, and while interest rates are not expected to rise on this occasion, the market will be looking out for indications of whether future interest rate rises are likely to be brought forward.

There is also the release of quite a bit of data that could move the pound one way or another against major currencies.

Inflation data is published tomorrow for February and this is expected to show a slight fall on the month before. But any difference to this could lead to currency turbulence.

Wage data is published on Wednesday, and this is expected to show an increase in UK wages paid to people, and this is likely to have a positive effect on the pound.

While there is potential for fluctuations in the pound this week, other market influencers such as shipping and the broader commodity complex seem relatively stable at present.

 

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