Recycling prices and market commentary: 18 September 2020

September 18, 2020

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It was a steady recycling market this week with nothing truly dramatic happening for those trading recyclable materials.

There were little tweaks taking place for most materials, but these could be the seeds of more troublesome times over the coming weeks.

What is clear is that there is a lot of uncertainty around, especially with reports that the Government is considering a two week lockdown in England. Without any detail as yet, and what this will mean for volumes of material, especially from retailers, there are fears it could be a tricky few weeks.

With schools now back, the market is also turning its attention towards what is traditionally a busy period from October in the run-up to Christmas. The problem is that nobody knows what the implications of Covid-19 will be on this year, and that is causing uncertainty.

In the currency markets, the pound ended the week down a touch on last week at $1.28 from $1.29 a week ago. Although it dipped to €1.08, the pound ended the week against the euro unchanged on last week’s €1.09.

Recycled plastic

With the PRN/PERN just dropping by a couple of pounds, there was no change to the price of plastic packaging grades this week.

This was especially the case as demand and supply seems well balanced at the moment.

HDPE seems the material with the strongest demand, and this is helping to keep underlying prices at a high level.

This isn’t the case for PET and LDPE though, where the non-PRN/PERN underlying price is weaker due to the low price of virgin plastics. Without the support you would normally expect from the PRN/PERN due to the suspected fraud that has/is occurring, then this market looks set to stay challenging for a while yet.

Indeed, UK buyers aren’t very active for both of these grades, although there does remain a bit of interest in Europe. Elsewhere is quiet too. It wouldn’t be a surprise if it stays like this for the remainder of September, and then beyond October is anybody’s guess.

Forecast prices

	1-week	4-week
PET	228-234	225-231
HDPE	413-419	408-414
LDPE	160-166	157-163

Recycled paper

This week was a steady recycling market, but with a split in opinion on where it was headed. Some are expecting the market to soften (and think it is already doing so), while others believe we will see a steady increase in price over the coming weeks as we head towards the traditionally busier pre-Christmas period in October and November.

On the one hand, there are those who see the upcoming exit of China and end of shipping there from early October, tougher rules to Indonesia and a 50% cut in exports to Turkey as the factors that will define the market in the coming months as end markets will be tighter to access.

But on the other hand, there are those who expect the traditional Christmas period will see more online orders this year due to Covid-19 and greater demand from UK and European mills that will need to fill the packaging needs of online retailers.

The reality is that both of these scenarios are likely to happen in some form, it is just what becomes the dominant factor in price or whether they cancel each other out. This is a year like no other and predicting the market in the next few months is a finger in the air job as historical precedents are at best different and perhaps irrelevant in late 2020.

Although some felt the market was weakening, the price this week overall seem to be up by about £2 for OCC. This increase seemed to be driven by some demand from a Chinese supplier or two looking to fill quota, plus non-inspection destinations seem to have upped prices a little this week.

Mixed was steady and orders are still coming from Europe in particular for it. News and pam has seen some interest in the last week too and was up a bit.

Forecast prices

	1-week	4-week
OCC	80-84	79-83
ONP	65-69	64-68
Mixed	31-35	31-35

Recycled metals

Non-ferrous and aluminium grades increased this week. All steel grades, including cans, saw a £5 per tonne rise, while aluminium grades (but not cans) were up £50 per tonne.

Copper grades dropped by £100 per tonne though.