Recycling prices and market commentary: 25 September 2020

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Cardboard recycling

“Everyone is sitting on their hands waiting to see what will happen” came up in a few conversations today and has clearly been talked about in the recycling industry this week.

For paper and plastics, there are different reasons for this, but it is reflective of the uncertainty that is being strongly felt (see below for more on this).

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In terms of universal themes, further Covid restrictions and lockdowns are leading to people wondering what will happen next. Will it be like the spring when some shortages occurred Europe and this led to price spikes for some grades? Or will it be different this time especially as Christmas consumer patterns will be affected?

The letter sent this week from Michael Gove to hauliers warning of 7,000-strong queues of lorries in Kent after the end of the Brexit transition in January also spooked the market as they wondered how this will affect UK material.

In the short-term, a slightly weaker dollar at $1.27 compared to $1.29 a weak ago brought a little relief to the deep sea export market, while those trading into Europe saw a relatively steady FX rate a touch below or above €1.09 all week.

Recycled plastics

It was a relatively steady week for packaging grades this week, despite a small fall in the PRN/PERN value by a couple of quid.

The market remains challenging with low physical prices and low certification prices making it hard to make money.

PET bottles saw a small increase of £5 per tonne on the back of recent increases in the price of virgin material, but HDPE and LDPE grades remained the same.

Buyers and sellers appear reticent to trade in this environment, especially with the uncertainty in the wider economy and how that will pan out in an already difficult market.

Forecast prices

1-week4-week
PET230-236233-239
HDPE403-409410-416
LDPE160-166160-166

Recycled paper

For OCC, there was a buyer fulfilling an old order that helped to push prices up a couple of quid as they needed to get the material on the water quickly and so were paying higher to secure material.

Otherwise, there is great uncertainty about what October will bring due to Covid in particular. Will it be like Spring where European lockdowns led to high UK prices, will it be a traditionally busy October and November ahead of Christmas and will online retailers need extra cardboard packaging during this time as people head online even more this year?

Or will European mills stay open and have all they need? Will the end of Chinese buying, reduced Turkish quota and challenges in sending to Indonesia reduce demand in the market?

Nobody quite knows and everyone is waiting to see if a brave company will break one way and whether the rest will follow. It seems those who believe the market is headed lower outweigh those who are optimistic, but the first weeks of October might bring more insight on this.

The picture for mixed is slightly different where German demand helped it pick up a bit more this week. The question is what is the limit these mills are willing to pay?

Forecast prices

1-week4-week
OCC84-8881-85
ONP63-6762-66
Mixed38-4236-40

Recycled metals

Copper grades were the only mover this week as less interest on the LME led to a £50 per tonne price fall.

Recycling prices

For recycled paper prices, click here

For recycled plastic prices, click here

For recycled metal prices, click here

For recycled glass prices, click here

For PRN/PERN prices, click here

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