Those trading recycled materials this week seem unsure about what is going to happen over the next few weeks, and are understandably being cautious.
A combination of a new PRN/PERN compliance year, Brexit, Chinese New Year, the general closing or closure of Asian markets, a sluggish UK and global economic picture, plus haulage and shipping issues isn’t making for a confident market.
Prices remained relatively stable despite this, although OCC saw a bit of a drop and some industrial grade metals also fell.
But the general report is that there isn’t a lot of trading going on across material grades. Those who have material to sell are waiting in the hope of price rises (which some think aren’t likely to come in the near term), or a rising PRN/PERN price for packaging grades. Those who might normally wish to buy are being cautious because they are unsure about the value of the finished goods, or that they expect prices to fall (which some think isn’t likely to happen in the near term either!).
The result is a market waiting to see how all the factors that are making things tough will play out.
A strengthening pound isn’t helping exporters either, with it trading against the dollar at $1.29 this week compared to $1.27 a week ago.
From below €1.11 a week ago, the euro has also gained ground to reach €1.13 at the time of writing.
It remains the case that many of those trading recycled materials, and packaging grade plastics in particular, are still awaiting accreditation for 2019 from the Environment Agency.
This means some big buyers are not able to trade PRNs or PERNs and as such are not particularly active in the physical market either, especially as there is no guarantee they can backdate.
As a result, the market is sluggish with those who are able to buy taking a wait and see approach.
This approach is down to the PRN/PERN situation but also uncertainty around where the PRN/PERN market is headed, where the physical material market is headed, which markets will remain open, Brexit and more. The plastic recycling market really isn’t liking this uncertainty.
It remains the case though that there is still some demand for packaging grades from Europe, especially where the PRN is involved.
Film grades saw a small price rise as a result last week, and some are still able to achieve £20 to £40 above our published price depending on the buyer.
UK and other non-European buyers are not so keen on the material and can be a similar amount below our published price.
There was a cooling of the OCC market this week with almost all buyers lowering prices.
Chinese buyers lowered their prices by up to £5 on last week putting them typically in a £90 to £95 range.
Non-China also fell with £70 to £75 not unusual depending on the destination.
With a drop in price by up to a quarter in the US, the upcoming Chinese New Year celebrations and reports that many mills are full or not interested in buying, the next few weeks until the end of the month are looking sluggish for the price of OCC.
Mixed is also losing interest with the price coming down by just a pound, but reflecting a pattern seen over recent weeks.
SOW and multi though retain interest and good value can be achieved for these grades at present.
Copper was the only metal to see a price change this week, with it coming off by £50 per tonne.
Otherwise, all other metals were at the same price as last week.
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For PRN/PERN prices, click here