Crazily high prices are being paid for plastic packaging grades at the moment, and crazily low prices for recycled paper grades.
The PRN/PERN value has risen for plastics again, breaking the £200 barrier and physical prices have responded immediately.
For paper grades, it is a different story, with prices falling again this week due to a lack of demand.
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Clearly, one of the big national stories of the week was the administration of British Steel. It hasn’t affected physical steel prices as yet, but the PRN/PERN value has jumped in anticipation it will hit can values.
The pound dropped a touch against the dollar this week to $1.26, compared to $1.27 a week ago.
It also dropped against the euro to €1.13 from €1.14 a week ago. The low pound against the euro seems to be making UK material attractive to European buyers, but the cheap pound against the dollar is not having the same effect for deep sea destinations.
As mentioned above, European buyers are like children that have been prevented from having sweets for a year. They are piling in for UK packaging grades at the moment.
This is because the material is fundamentally cheap, but the PERN value is extremely high having reached £207 this week – and breaking the £200 barrier for the first time.
When combined with a €1.13 exchange rate, compared to €1.16 a month ago, the UK is happy hunting ground at the moment.
This has pushed up the price of packaging grades by £10 per tonne. High prices for packaging grades seems to be the norm at the moment.
The opposite effect of this is that UK buyers are struggling to compete. At least one major buyer of bottles is understood to be at low purchasing levels in the market at the moment as it doesn’t want to pay such high prices. Will it be able to continue this stance in the coming weeks though?
There is a lot of gloom around in the paper market at the moment.
Chinese buyers were virtually non-existent, and others in the market were not exactly stepping in to fill the void. Even such low prices are not acting as a magnet for destinations such as India, South East Asia, Europe and UK domestic markets to pile in and stock up.
Part of the reason is they are already well stocked with finished goods not exactly racing out of the door. But it is partly down to cheap US fibre flooding Asian and Indian markets.
OCC prices fell again, and are now routinely below £60 and as low as £50. Some will offer less than £50 next week most probably.
The key question next week will be if Chinese buyers return to the market for June. If they don’t, they probably won’t be around for the whole month.
Mixed and news and pam prices were unchanged.
Steel can and industrial steel grades have not been hit as yet by the administration of British Steel. There was a wait and see attitude in the market this week, but that could easily change next week.
As mentioned above, the PRN price has risen to £30 in anticipation that it will become more difficult to recycle steel cans.
In industrial grades, both copper and brass saw price falls this week with each dropping by £50 per tonne.
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