Plastic PRN/PERN prices have jumped by over £100 per tonne this week in signs that the madness is not coming to an end.
This has also pushed up the price of packaging grades to historically high levels. Is this sustainable or stupid? Time will tell but the latter is looking more likely (more below on why the PRN/PERN system might be broken).
Otherwise, markets were quiet. There was barely any trade going on in paper market, while metals saw some adjustments.
The PRN/PERN market will be discussed at The Recycling Event in the Market Intelligence theatre. Book your tickets for just £85+vat at www.therecyclingevent.com
The pound fell a touch to $1.26 from $1.27 last week, while against the euro it was unchanged at €1.12.
Some people are currently making a lot of money from the plastics recycling market as a result of the current PRN/PERN price. With prices reaching £350 (we’ve even heard above £370 as today went on), this was around £100 more than last week. You might remember we said there was speculation going on to push it up to £250 last week.
The conditions haven’t changed this week, and speculation is pushing up the price. Buyers also seem to be panicking about meeting their obligation and the recycling market is taking advantage.
One argument is that the PRN/PERN market is working, helping to fund new plastics recycling infrastructure and ensuring the UK is able to continue moving packaging grade material. That is all true and it is all happening.
The problem is that someone has to pay for this, and at £350 per tonne and above, obligation becomes very expensive. At what point do those who need to comply say ‘no more’ and risk being taken to court by the Environment Agency for non-compliance. If their company is at risk from the sudden massive cost of compliance, especially in a slowing global economy, many directors of small- and medium-sized companies, and possibly some large ones too, will have to make that decision.
A year ago this week, the plastic PRN/PERN was £63 per tonne. If your obligation was for 500 tonnes, this meant your bill was £31,500. This week those 500 tonnes at £350 means your obligation costs £175,000 – a difference of £143,500. That is why something will have to give eventually, because this cannot go on because it is becoming unaffordable.
There are also rumours that some are holding back PRNs in the hope of the price rising, so they make more money. Fraud is said to be returning with a vengeance.
For the time being, who knows where prices will go next week or in the coming weeks? All we know is that record prices for plastics are helping to move UK material.
Unlike the crazy plastic market, the recycled paper sector has ground to a halt.
Trading of spot material is pretty much non-existent to all destinations, domestic and export.
Only contracted tonnes seem to be moving at the moment.
The OCC price was the only one that moved, losing £2 per tonne as a result of some small trades going at lower value.
Brass increased by £25 this week, while stainless steel grades saw a £50 to £75 per tonne increase.
Otherwise, there wasn’t much change. Steel prices remain unchanged despite the ongoing uncertainty with British Steel.
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