The PRN/PERN supported the market this week, with prices of this and the physical materials remaining stable on the whole.
Indeed, the market is trying to work out what September will bring and whether the support mechanism of the PRN/PERN will kick in further, or whether expected price drops will dominate.
There isn’t a huge amount of optimism around in the market at the moment, with the global economy and energy prices weighing heavily.
But some retain some hope that the market has proved resilient so far and that ongoing demand for recycled content will help prices from falling too far. Some even see price rises on the horizon, but they tend to be in a minority.
The pound dropped to $1.15 against the dollar this week, from $1.18. The same drop from €1.18 to €1.15 was seen against the euro. This also provides some help to exporters, making their material cheaper.
There wasn’t any real movement this week, even though the PRN/PERN price dropped by £10 per tonne.
This was more of a symptom of not too much volume being traded as market participants tried to work out prices for September, especially those trading monthly.
There is a lot of fear around for all grades that after going up this year, they must come down. The question is by how much, and that is what many are reflecting on at the moment.
All eyes will be on the monthly NPWD data due soon as that may give an indication of the PRN/PERN support for the coming month.
Mixed edged down a bit this week as European demand, especially from Germany, continued to weaken.
Multi and SOW also came off by about £5 per tonne, again as there was less interest from European buyers.
It remains the case that the paper PRN/PERN is providing strong support for OCC in particular, and at £35 per tonne is masking underlying weakness in the market.
With orders poor from most markets at the moment, there are fears the price could come down over the rest of the month. This view isn’t shared by everybody though, who argue that there isn’t enough supply of material to match even weak demand. They also suggest the traditional pre-Christmas rush for material will help.
It remains to be seen whether the glass half-full or glass half-empty viewpoint will win out.
Only copper changed this week losing £100 per tonne.
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