OCC values went through the roof this week as lack of supply and strong demand sent prices up beyond £100 per tonne.
But is this just a temporary bonanza for paper traders? Find out more below.
Plastic grades saw an increase for PET bottles, but film eased back a bit.
In metals, copper saw an increase but was the only mover.
For those trading to deep sea destinations, the pound was a little stronger against the dollar at $1.25 this week compared to $1.23 a week ago. Selling material into Europe saw the same exchange rate as last week at €1.14.
PET bottles increased by £25 per tonne as a seasonal increase in consumption and weaker supply helped to push up the price of the material.
However, LDPE film saw a fall of £25 per tonne as demand in UK and Europe eased and destinations further abroad are taking little material at present. Plus, the underlying picture is one where virgin prices and oil prices are lowering, so some buyers are nervous of overpaying if those they sell to are expecting lower prices for finished goods too.
HDPE bottles saw no change. There was also no change for the PRN/PERN price.
Demand has been exceptionally strong for cardboard in particular this week pushing OCC values comfortably beyond £100 per tonne. The last time it was up above £100 was in October 2018.
With prices at £115 to £130 typically going into Europe, and even some offers up to £150, can it go even higher? The market feels this bubble is already running out of air as the UK and European mills that have been driving this price rise are starting to resist paying much more.
Now we are in May and there are bank holidays and school holidays, April has always been a time to stock up, and the coronavirus supply has made this more evident this year. Arisings of material remain low, especially good quality commercial tonnages, so much will depend on whether demand remains as strong. The market view is that current demand levels can’t last.
Mixed paper also caught some of the attention with prices above £40 paid by some European mills, although most and UK domestics were below this.
Indeed, most paper grades saw more interest this week.
However, trade of all grades to Asian destinations remained weak while those countries enforced strict lockdowns.
The PRN/PERN value for paper grades that are eligible has also increased, helping to support the increased price. With material hard to come by, this has pushed up the price to above £15 per tonne.
Copper saw an increase of £50 per tonne this week reflecting an increase in value on the LME.
One other interesting development was the increase in the steel PRN/PERN value to £40 per tonne. This is a reflection of expected less demand for steel for use in construction. Even if packaging use has increased recently, the overall demand for steel is expected to go down.
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