It seems that, at the moment, there is a new development that affects the market and prices of recycled materials every week.
This week’s news is that the Chinese Government has imposed 25% tariffs on material from the United States and Canada as reported first on REB Market Intelligence.
While tariffs were placed on recycled plastics, this material is banned for import into China anyway so this won’t make any difference, except for the post-manufacturing plastics that are still allowed until the end of the year.
For metals, the volume that goes to China from the UK is small anyway, but US recyclers do send material there. This could affect the global price, and also send Chinese companies searching for new, cheaper markets including UK and Europe.
But paper looks set to be most affected, and there is more on this in the recycled paper section below.
Otherwise, the market is relatively quiet overall with many market participants on holiday.
They are probably best being away, even though in normal times market conditions would be ideal, particularly for exporters. With the pound trading at $1.27 this week, UK material is exceptionally cheap for deep sea destinations if you can find anywhere able to take material still. At €1.11, the pound is very good value too, so those able to send material to Europe are benefiting from being cheaper than local material, especially when the PRN/PERN price is giving an additional advantage.
It is just a pity that demand isn’t great from Europe at present due to holidays. This might improve in September though if conditions remain the same.
Recycled plastics
Trading is currently quiet in the market due to the August holiday period, but also because it is increasingly difficult to find destinations for material.
There are reports that yards are increasingly filling up with plastics waiting for a place to go to, or in hope that a destination will be found. Some are hopeful that Vietnam and Malaysia will reopen in the coming months, but others aren’t so sure.
While prices remain stable, there is increasingly an expectation that prices will have to come off as supply starts to exceed demand.
For those that are able to find an end destination, the still high PRN price is helping as is the falling pound against the dollar and euro that is making UK material good value.
Recycled paper
The tariffs placed on US recovered fibre by the Chinese Government have got people wondering what this will mean for the UK market.
Certainly, there were some who saw the news early enough who sought to get a higher price from Chinese buyers on the expectation that prices will rise. The Chinese buyers who were active in the market were also benefiting from an advantageous exchange rate, so were prepared to push their price up a bit higher for their specification.
However, there is also a bit of resistance coming from the Chinese buyers. One of them has not been so active in the market in recent weeks, while the others are prepared to push back a bit on price as they feel their current premium for Chinese specification material is sufficient.
Indeed, they are hopeful that the current premium is encouraging more companies to meet it, and this will give them more choice, especially once the market becomes more active in autumn.
There is also the view that even with the tariffs, the US market won’t be shut off completely. Despite a falling yuan against the dollar and a 25% tariff to consider, and a more rigorous Chinese inspection regime than faced by UK and European exporters, US material will still work out cheaper than local Chinese material.
Other destinations for OCC remained relatively stable, although the exchange rate benefit helped to push up the bottom end of the market too.
Mixed paper also increased a touch due to the better dollar and euro situation.
Recycled metals
Copper grades gained £150 per tonne this week as speculators pushed up the price of the virgin metal on the LME, following news of stable Chinese inflation data.
Otherwise, there was little change in scrap metal prices.
Recycling Prices
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