Falling PRN/PERN values is the main area of concern for the recycling market this week with many key grades seeing a drop.
Paper, plastic and aluminium PRN/PERN prices were all down, affecting the ability to transact these materials.
While paper and aluminium prices held firm for now, plastics suffered. More on all this below.
There is a great deal of uncertainty across the market at the moment, due to fears that underlying conditions look increasingly poor. Whether this is temporary or likely to last for many months is unclear and will be dependent on how well the global economy recovers from the coronavirus pandemic.
The pound suffered against the dollar this week falling to $1.24 from $1.26 a week ago. It also fell against the euro to €1.10 from €1.11 last week.
Falling PRN/PERN values pushed down packaging grades this week.
In bottle grades, PET held up due to reasonable demand, but HDPE bottle grades dropped by £15 per tonne. This was still slightly better than the £22.50 drop of the PRN price.
Some decent demand from Europe helped to keep the price fall for LDPE film to just £10, but buyers there are increasingly attempting to lower the price, especially as their own domestic markets are suffering.
The PERN gives UK exporters an advantage still as it means it is more competitive that domestic European, but if it were to fall to near £60 per tonne, then this advantage disappears.
There is a lack of liquidity in the plastic PRN/PERN market at the moment, and it could be a challenging few weeks of trying to understand where pricing is heading, and how to price physical material, without getting burned.
OCC prices pretty much ended this week in the same place as they were last week.
Mills across the world appear to be playing a waiting game to see how well the global economy responds to coming out of lockdown, and getting a sense of how much finished goods they need to provide.
As a result, they aren’t too eager to buy. Having said that, there are still some that are active and a little more seems to be going to China to keep stocks up. As mentioned last week, MSC is likely to stop shipping paper to China from 1 July and this has led to a bit of a flurry to meet quota in case other lines follow its example and stop servicing the China route from then.
Mixed also came off a bit, aided by falling PRN/PERN values and a softening domestic and European demand.
With the PRN/PERN price dropping by about £6 this week, it is a concern that this mechanism that has helped support the physical price might not be there in coming weeks as fibre prices are also expected to come down.
Industrial grades and can prices were all stable this week with little change recorded in prices.
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