Recycling prices and market commentary: 12 July 2019

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aluminium can recycling

Aluminium and plastic PRN/PERN values hit £200, in what was another odd week for this market.

The price of the physical plastic responded by increasing in value, while it remains to be seen if the same will happen with aluminium.

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What is for sure, is that these are volatile times for plastic and aluminium PRN/PERNs with the former particularly susceptible to yo-yo movements.

Paper grades were largely stable this week with supply and demand both remaining weak.

Against the dollar, the pound briefly dipped to $1.24 in the middle of the week, before recovering to $1.25 by today. This was where it ended last week and started this week.

The pound was unchanged against the euro at €1.11.

Recycled plastics

Yet again, it was the PRN/PERN that was dominating the market conversations.

With the latest monthly data suggesting that Q2 (published in ten days) is set to be a record breaking one on the National Packaging Waste Database, wiping out the under-performance of Q1, it was quite surprising that the PRN/PERN market increased by £50 to reach £200 again.

Normally, you would expect the PRN/PERN price to have dropped in this situation.

The explanation appears to be that some are holding onto PRN/PERNs in the hope that the price will rise again, and this seems to have happened. The problem with this is that these can’t be held onto forever, and if Q3 and Q4 perform as Q2 is expected to, they will have to be released at some point, and timing will be key.

Packaging grades increased by £30 as there was a bit more caution on whether this £50 increase in the PRN/PERN price was temporary or might fall back again or rise.

Forecast prices

1-week4-week
PET360-366347-353
HDPE600-606601-607
LDPE470-476449-455

Recycled paper

It was another quiet market this week, with not too many changes.

OCC increased by £1 due to a little extra support from the exchange rate briefly helping in the middle of the week.

Otherwise, prices were pretty static and both supply and demand of recovered fibre were pretty low. News that China has released another 1.6 million tonnes of quota, has barely raised an eyebrow in the market. That’s probably because US material remains of most interest to Chinese mill groups for the time being.

There was a lot of interest in China’s Government publishing its draft revision of its solid waste laws, that outlined that it will “gradually reduce imports of solid waste to zero”. This appears different to its previously stated ambition of reducing them by the end of 2020, although some in the market believe this remains the deadline.

However, by not giving a date in the law, it potentially gives China some flexibility.

China is looking to extract as much material out of domestic sources as possible, but it has been suggested that the quality coming out of the pilots so far has been poor.

Indeed, a report in The Guardian today suggested that people in Shanghai are struggling with the new waste sorting regime.

With that in mind, it could be that China recognises the need for flexibility to provide material to its paper mills, especially to feed the packaging requirements of its manufacturing sector and the behemoth that is Alibaba.

Forecast prices

1-week4-week
OCC59-6358-62
ONP78-8278-82
Mixed25-2925-29

Recycled metals

As mentioned above, the aluminium PRN/PERN price increased to £200 this week. It hasn’t yet affected the physical price, but might yet.

The reason behind the rise appears to be someone holding onto PRNs in the hope the price rises, as it has done in previous years.

Copper and brass grades reflected rises on the LME by increasing by £25 per tonne, but other grades were stable.

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

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