The main drama was happening in the plastic recycling market this week.
With the volatile PRN/PERN price, some companies still awaiting accreditation, and the ongoing search for markets, it was difficult for participants to get a grip on what is going on in the plastic recycling market at present. More on this below.
Other markets also look uncertain with the global economy starting to weigh on both metals and paper. The start of 2019 is proving difficult to be optimistic about.
This week also represented the first week back to work for many people, so that also meant that the trading week took a few days to get going.
Those that were exporting were also having to respond to an exchange rate that saw the pound strengthen against the dollar from just below $1.28 from $1.26 a week ago. This makes UK material more expensive.
As mentioned above, the recycled plastic market was confusing this week.
Part of the reason for this was people trying to get to grip with what was happening in the PRN/PERN market. With the 2018 transitional price still at last week’s £132 per tonne, the 2019 price was at £106 per tonne. Is this a reset of the market for 2019? Possibly, but with target proving challenging for 2019, compliance schemes are expecting PRN/PERN price rises and it wouldn’t be a surprise if by the end of the month there is little different between the 2018 transition price and the 2019 price at the time.
Many plastics companies are still awaiting PRN/PERN accreditation, which effectively makes it not worth trading until they get it. Some of the largest plastics businesses are still not accredited, which is proving problematic for bottle and film grades.
Those that are accredited are making hay while the the sun shines. For 98/2 film for example, the market is trading anywhere between £180 per tonne up to £300. European demand is good for film when the PERN value is taken into account and is achieving top dollar, well top euro prices.
However, domestic and other export companies don’t have nearly the same demand, so are trading at a much lower level in the range.
Until there is more clarity on the PRN/PERN situation, and until all companies are accredited, expect the market to remain confusing.
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The spread on OCC between China and elsewhere narrowed a bit this week.
Demand from China has softened a touch with China specification material trading in a £95 to £105 range.
Elsewhere, demand picked up a touch with much of the market above £80 and below £90. However, haulage issues meant that some UK regions could only attract £70 plus into non-China Asia.
Domestic and European demand for mixed paper is also falling with mills largely full up. Indeed, mills everywhere appear to be well stocked at the moment.
With the world economy also showing signs of struggling which will affect demand for finished product, it could prove to be a challenging few months for the recovered paper market.
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Aluminium can prices have fallen this week after prices fell on the LME. However, the price fall was also aided by a major European smelter also temporarily pulling out of the market due to being fully stocked.
With a major UK buyer likely to pull out this month for the same reason, aluminium can prices are likely to remain weak.
Steel can prices have also eased down by £10 per tonne due to falling steel prices for virgin material having an impact.
For recycled paper prices, click here
For recycled plastic prices, click here
For recycled metal prices, click here
For recycled glass prices, click here
For PRN/PERN prices, click here