While recycling prices remained stable for almost all recycled grades this week, there are things happening in the background that could make September more volatile.
With many people on holiday either side of the August Bank Holiday weekend (apart from Scotland), trading volumes were reportedly small.
But there is activity going on in the PRN market that has pushed some even higher, with predictions that they will explode in September as people get back from holiday and realise obligations need to be met. The expectation is that they will go higher, but how high is a matter for speculation. However, it is true that overall the PRN market has never been higher than it has so far.
Exporters have also reportedly struggled to get containers this week, due to an ongoing situation with a new Terminal Operating System that was introduced at Felixstowe in June still causing issues, combined with the fact that more lorry drivers than usual appear to be on holiday. Both of these are expected to be temporary.
International markets remain challenging with Vietnam reportedly struggling still to process containers at portside, while Turkey looks effectively shut at the moment while the value of the Turkish lira drops.
Those that are able to export found the pound strengthened slightly against the dollar to reach $1.28 compared to $1.27 last week, but it still makes UK material very good value compared to other markets.
But anybody sending material into Europe this week will have found better value, with it dropping from €1.12 a week ago to €1.11 by the end of the week.
Recycled plastics
Turkey has emerged as a key market for some grades of recycled plastics (particularly film) over the last few months, but this market appears to have ground to a halt.
A spat with the US Government caused the Turkish lira to crash last week against international currencies, having steadily declined over previous months anyway.
The crash immediately made it more expensive for Turkish buyers to purchase material, so they switched off. While it also makes it better value to sell the recycled material on the international market, it is the current uncertainty that has led them to halt purchases until things settle down again especially if the finished material is to be used for domestic purposes.
This means that destinations for plastic grades are becoming increasingly difficult to find at the moment with Asia effectively closed, Europe on holiday and domestic purchasers picking and choosing.
There is also increasing panic over the value of the plastic PRN. It increased to over £70 this week from around £65 a week ago, and there are predictions it will rise even higher in September as people return from holiday and panic over their obligation for the rest of the year. It will all depend on whether the data shows anything different of course.
Recycled paper
Prices for paper grades didn’t really change this week, but the situation in the market remains uncertain.
Chinese buyers were still paying top dollar for OCC and news & pam, with the exchange rate, increasing PRN and cheap shipping all helping. They were also aided by small price rises for domestic material in China.
At present, the tariff on US material hasn’t had any impact on the UK market, as it appears that US buyers and sellers have agreed to meet half way on the tariff costs that has helped to mitigate some of the impact, especially as US domestic mills are also buying helping to bring some competition to price.
Exporters to China have also reported a difficulty in getting containers as mentioned above, but this is expected to be temporary.
There are also grumbles about the inspection regime being introduced by CCIC that requires pre-loading photos being sent to the inspection company. However, this is still more lax than the inspection regimes being implemented by CCIC in other countries. This is leading to fears that UK material might not be deemed legal when it reaches Chinese customs, plus confusion remains around exactly what the UK to China inspection regime should actually be and how it is exactly being implemented.
UK and European mills are reportedly getting full having gorged on cheap mixed, and the coming weeks could see some easing off in purchases of that grade in particular.
Recycled metal
There were no changes for industrial metals this week, but the price of steel grades fell by £10 per tonne across the board, including cans.
Recycling Prices
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