While most recycling markets saw dramatic price falls this week, that wasn’t the case for OCC which actually increased in price.
Clearly, coronavirus is causing disruption, especially as borders are closing. People are beginning to wonder where material can be moved to or if there will be need for storage.
For the time being, material is being sent abroad into Europe and Asia as usual. Inspections are continuing as normal either by inspection or environment agencies, albeit with additional PPE such as face masks.
Container availability has improved a touch and vessels are now on the way back from Asia.
However, there is also the risk that markets might be harder to access once material is on the water. For example, while ports in Malaysia remain open, the country is embarking on a two week shutdown that means material might have to be stored at the port. Vietnam is now advising people to stay at home, while much of Europe is increasingly under lockdown. India is holding a one day lockdown on Sunday and advising people to stay at home after that. Turkey has shut bars, restaurants and schools for two weeks.
All of these measures are going to make it harder to export.
The coronavirus situation is also having an impact on the PRN/PERN market, where buyers are reluctant to purchase in order to preserve cash for other priorities. As a result, quite a few dramatic price falls were seen in the market with plastics down in particular.
Foreign exchange markets were also extremely volatile this week. Against the dollar, the pound seemed headed for parity but recovered towards the end of the week to $1.17 at the time of writing. This was a big fall despite the recovery from $1.25 last week.
Against the euro it fell to €1.07 from €1.10 a weak ago.
The cheaper pound did help some UK material move due to it now being much cheaper than other destinations.
Plastic packaging grades saw some dramatic price falls this week due to the falling PRN/PERN as mentioned above.
HDPE saw the least overall fall due to an expectation that more content will be needed as people stockpiled milk. The price still fell though on the back of the £75 drop in the PRN/PERN price on a week ago.
LDPE film still had some demand from Europe, but this was easing, while UK and deep water buyers were still active. Although not reflecting the fall in value of the PRN/PERN due to some stocking ahead of expected challenges to secure material, film prices saw a big drop and may fall further in coming weeks.
PET bottle demand dropped though, especially as people are less likely to spend time out of the home, and the full value of the PRN/PERN price was reflected in the physical value.
There was decent demand for OCC this week as mills sought to buy ahead of expected border closures and populace lockdowns.
Germany was very active, as were India, Indonesia and Turkey, while UK mills were buying more than they have in previous weeks.
Perhaps indicative of a market that tends to operate in the here and now, there is hope that prices will continue to rise in the coming weeks. If this is to happen, it would require borders to remain open, containers to be available, favourable foreign exchange, availability of mill workers and demand for finished product. Perhaps, this is more indicative of upcoming lower prices as has been seen in other material markets.
Other paper grades were stable.
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Falls were seen across the board with copper in particular hit badly. Around £550 was knocked off the value of the metal this week.
Brass, aluminium, lead and ferrous grades all saw a big drop.
Aluminum can prices have not been affected as yet, but steel can prices were down by at least £25.
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