Like everything else, coronavirus and its implications is dominating conversations in the recycling market.
It is the uncertainty that is of most concern. Everyone seems aware of the difficulty and expense of getting containers to Asia now, but people are worried that trade into Europe may soon ground to a halt. There are also fears that UK facilities will stop taking material if lots of staff fall sick.
On the other hand, as consumers are stockpiling, demand for packaging is increasing. Plastic packaging grades are in need, while there appears to be a surge in online shopping and more cardboard packaging. The issue seems to be if there will be enough places to send the material to get it recycled, even if the demand for it is there. Only time will tell on this.
One positive is that there were strong carry-over number for paper and plastic from the 2019 compliance year, that should provide a little support for what may prove a challenging 2020 compliance year due to coronavirus.
Those who are able to send material abroad, benefited this week from a falling pound with it trading at $1.25 compared to $1.30 a week ago. This made UK material cheaper, although there is the additional shipping expense of course. Against the euro, it also dropped from $1.15 a week ago to $1.11 at the time of writing.
Bottle grade prices held firm this week as demand for these remained good, due to people buying plastic bottle products to stockpile.
With a stable PRN/PERN price too, there was no incentive for prices to fall. Over the coming weeks, the challenge might be to actually find homes for all of these bottles that are collected, especially for PET if Europe becomes a harder market to access.
Film grades saw less demand, especially from the spot market. This is over fears that there will be less global demand for film, and people don’t want to overpay or be stuck with it. Prices dropped by about £20 per tonne for many, although some were still receiving good orders particularly from European buyers.
The PRN/PERN carry over from 2019 into 2020 of just short of 52,000 tonnes does provide a bit of leeway for the plastics market, especially as it is a marked improvement on the 23,000 tonnes that were carried over into 2019.
In normal years, this 52,000 tonnes should be enough to meet the stretched targets for plastic packaging recycling this year, but we just don’t know what is ahead with coronavirus on what the implications will be for the recycling market.
While the pricing of material was unchanged for two weeks in a row, coronavirus and its implications has created a lot of uncertainty in the recovered paper market.
Asian markets have proved challenging for a few weeks now, but people are finding ways and means to move material. Containers have been available for Asia, but have come at a price, and some large companies have been prepared to pay it to get material on the water.
Others have sought refuge in European markets, but this looks to be challenging now due to coronavirus. Even if borders and ports remain open, there are fears that mills may close to ensure staff are isolated from the virus. The same could happen with UK mills.
On the other hand, generation of material has also been tough with not much fibre around. There is a school of thought that this could change if more people end up shopping online. But with so much uncertainty around at the moment, nobody is quite sure what is ahead for the recovered fibre market.
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Copper grades fell by £100 per tonne this week over fears that coronavirus will lead to less construction in the short- to medium-term.
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