There was a sense of wanting to know the future this week in the recycling market, as few feel sure what the next few weeks will bring.
In the plastic packaging market, the present is all about waiting for the future release of the next monthly data around 10 October to try and get a better handle on what the data will do for the PRN/PERN market.
But in paper, there is a sense that some mills are trying to push prices down, but those who have material to sell are saying there is a scarcity of material available and prices should stay were they were.
The metal sector is used to volatility, and with prices rising a little on some grades this week, the future is about whether that is temporary or the market beginning to find a new level.
Of course, the haulage and shipping situation doesn’t seem to be getting any better, especially as there is now a fuel crisis in the UK to add into the mix.
In the FX markets, the pound dropped against the dollar to $1.34 from $1.37 last week and fell to €1.16 compared to the euro from €1.17 a week ago.
For those trading in packaging grades, there is uncertainty about the rest of the compliance year and what it will mean for the value of PRN/PERNs for the rest of the year.
While the price of the certificate increased by a couple of quid this week, most in the market want to see the September data due around 10 October. There are increasing doubts that compliance for this year will be as plain sailing as previously assumed.
It remains the case that some are just keeping their heads down, not wanting to issue PRN/PERNs due to recent Environment Agency audits and cancellations of accreditation.
But it is also true that the low August numbers spooked some, even if it was an unusual summer with so many holidaying at home. September will give more of an indication if compliance is still likely.
If the September numbers are normal or strong, then most expect the PRN/PERN value to drop. Alternatively, if September is weak like August was, then the price could soar.
Of course, this will then have an impact on physical prices. For the next ten days or so, it looks like the market will be pretty stable until this data becomes available.
There were very different stories this week, depending on who you speak to.
For some, it was doom and gloom, with prices looking set to fall, but for others, they assessed that there still isn’t much material around and mills will need to continue to pay if they want fibre.
The near future will seem to be about whether prices stay where they are or start to come down.
For OCC, there did appear to be a small shift downwards by about £5 per tonne, and mixed came down by around £10 per tonne. In particular, some Far Eastern and a handful of European mills appeared to be trying to negotiate harder.
However, trading volumes were relatively small, as most had already traded for October a few weeks ago, so the mills had a bit more leeway knowing stocks were either with them or on the way.
There is an expectation, with the continued haulage and shipping issues plus the UK fuel crisis, that November’s trading will start early again. How early remains to be seen, but next week is likely to be slightly too early, but the week after could be possible.
Good demand though for newsprint helped push news & pam and overissue news grades up higher.
Copper increased by £25 per tonne this week, but brass saw an increase of £100 per tonne.
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