Recycling prices and market commentary: 20 November 2020

November 20, 2020

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December is very much on the minds of recyclate traders at the moment, and this has helped to start some movement after a subdued November.

With the 2021 transition period now in view, trading for December has begun.

For paper grades, this saw OCC jump up (other factors helped too), while film grades have also started trading more on the basis of PRNs and PERNs trading higher for December.

However, shipping and haulage remains a problem across the board with containers or curtain sided vehicles hard to get hold of. Issues at Felixstowe remain, and with the end-of-year Brexit transition period not yet negotiated, uncertainty of what needs to be done to get material into Europe continues. This also help explain some of the extra December trade with European buyers looking for tonnage with higher PRN support, but also wanting to get hold of it while the UK is still part of the single market.

Those shipping to deep sea destinations saw the dollar up a little to $1.32 from $1.31 last week. Into Europe was no different to last week at €1.11.

Recycled plastics

With the PRN/PERN price for the December transitional period now at £75 per tonne, this starts to support the trade of physical material again, especially following the quiet November while the PRN price has been low.

Film grades started to see more interest from Europe at the back end of the week, hoping to take advantage of the improved December prices, but also because they need material.

Lockdowns across Europe are making it harder to access LDPE, and many also want to stock up before the end of the Brexit transition period.

This isn’t the case across the board though, and some (especially domestic buyers) are not prepared to match these prices, expecting the value of the material to come down again over the coming months due to all the uncertainty.

Bottle grades did not follow film in increasing in price, but there is expectation that the higher PRN over the coming weeks will support more interest in them.

Forecast prices

	1 week	4 week
PET	210-216	213-219
HDPE	394-400	381-387
LDPE 98/2	169-175	169-175

Recycled paper

There was a bit more heat in the market for OCC this week as people traded for December.

With the December PRN getting up close to £8 a tonne, this provided a boost to the market.

There was also some more demand from European mills for OCC as they are struggling to get fibre from local markets where lockdowns are taking place. They also want to make sure they have material before the end of the Brexit transition period as the uncertainty is making them fear whether they will be able to access more material.

Some of those, but not all, who are able to access containers also wanted to make sure material was on the water due to the container shortage with vessels heading back to China empty and therefore making other Asian destinations harder to access.

There was also some reluctance to pay the higher shipping fees that are being demanded to send material to non-China Asian destinations, when these rates are expected to drop once the Christmas period is over.

Now that many have traded for December, the question will be asked whether this was a sudden rush with no legs, or something that will be sustained in the run-up to Christmas?

Other grades saw no change this week.

Forecast prices

	1 week	4 week
OCC	86-90	87-91
ONP	60-64	61-65
Mixed	40-44	41-45

Recycled metals

Industrial grades increased this week in value following higher prices on the LME. Copper grades were up by £50 per tonne, brass by £100 per tonne, and aluminium by £50 per tonne. There was no change for ferrous grades.

The aluminium PRN is currently trading at £15 for the December transitional period, compared to £4 now, so this might provide a little more support for can prices in the coming weeks.