In what is normally the busiest time of the year for the recycling market, trading volumes look set to be lower than in previous years across the sector.
Chinese buyers of paper grades look set to exit the market imminently for the rest of the year if they haven’t already. Plastics sellers continue to look for end destinations, while competing against others. Metal markets also appear subdued.
In the PRN market, everyone is waiting for 21 October when the Q3 data is published to see what it will mean for the rest of the year. Any sense that targets look set to be met, and PRN prices may fall, but if they are looking challenging, then we may yet see even higher prices than at present.
Physical prices saw an impact from a higher exchange rate reaching $1.32 this week from $1.30 last week. Against the euro, the pound also strengthened from €1.13 last week to €1.14 today. All of this helps to make UK material a little more expensive.
Those who are trading internationally are struggling moving material with vessel space reported to be tight, and road haulage also proving challenging to get.
All in all, there isn’t too much optimism as we head towards the latter part of the year.
The market is waiting for the Q3 results from the National Packaging Waste Database to see what impact they will have on the PRN/PERN prices.
At around £70, this has been a big financial support for the market, and the Q3 data may yet influence the PRN price and subsequently the physical material price.
A combination of stronger demand as people consume more hot drinks made with milk as we head towards winter and the high PRN price has boosted HDPE bottle prices.
Otherwise, LDPE remains a buyers market for those sellers who can find one with UK buyers enjoying being able to pick the best quality material at good prices.
PET remains relatively stable, as do non-packaging manufacturing grades.
For OCC, the Chinese buyers are beginning their market exit for the rest of 2018. With no idea when they will get their 2019 import licenses, the big Chinese mill groups are not prepared to take the risk to ship – and the shipping lines aren’t prepared to take it either.
At least one of the Chinese exporters is still sending material, and can get vessel space until the last week of October to arrive prior to 31 December 2018 when the cut-off license period ends.
The other main two have effectively stopped purchasing at the moment for China, although will still be buying for other mill destinations they may have.
Price wise, the China specification price of around £180 per tonne was still available to those providing the right quality from the active buyer.
At the bottom end of the market, prices have eased down as other destinations hope to pick up better material at lower prices for the remaining months of the year.
Although somewhere between £80 to £100 is the norm for UK, European and non-China Asian destinations for OCC, it is expected this price will drop rapidly before the end of the month. The talk at the moment is somewhere between £70 to £85 for OCC for the remainder of the year, although of course, things can change in the market.
Other grades were unchanged.
Aluminium industrial grades saw a small fall of £25 per tonne this week, in what was otherwise a static market.
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For PRN/PERN prices, click here