Uncertainty is the key word that keeps coming up when you talk to anyone in the recycling market at present.
Fear of a complete China shutdown is dominating conversations, as is the closure of Malaysia to plastic imports for three months. At least Vietnam is showing signs that it will continue to accept material, even if it won’t issue new import licenses and imports will be subject to a tougher inspection regime.
There is a view that the market is changing fundamentally, but that it will take time for solutions to be found.
Now that the school holidays have started, many market participants are heading off to the beach, hoping not to panic about the future of the market. As a result, it is expected that as usual, the market will be quiet throughout August.
The problem is, with conditions changing regularly, nobody knows what they will come back to in September.
In terms of market conditions, everything looks flat at the moment. Shipping cost are broadly unchanged, if you can get containers to Asia. Many shipping lines are nervous about boxes getting stuck on the water if an Asian country changes its import policies. The lines are therefore reluctant to ship material, or if they do, it will be at a premium unless it is a high volume exporter.
The exchange rate between the dollar was largely stable too hovering around $1.30, and actually keeping UK material relatively cheap. Against the euro, the pound was also stable in the region of €1.12.
Recycled plastics
There is a lot of searching going on at present for end destinations for material.
Much of Asia remains shut, and even if it is open, it is hard to get containers to there (see more above).
Destinations such as Indonesia and Turkey have become more of a focus since Malaysia and Vietnam became more tricky, but Indonesia has a rigid and time-consuming inspection system, while Turkey appears to have rapidly filled up.
As a result of this, film grades have come off by £10 per tonne this week and the view is that there could be a bit more to lose on this too. Domestic buyers are able to pick what they want and are opting for quality at good prices.
Bottle grades remain stable with domestic and some European demand helping to keep recycling prices in decent shape.
With the Q2 packaging data published by the Environment Agency last week, there is a lot of scratching of heads at the high numbers that came through – a record quarter in face. This is because during this period, not only did the China ban remain in place, but Asian countries also were not taking enough material for this to make sense.
Maybe the data is correct, but not everybody is convinced. It does mean though that the PRN value dropped by a couple of pounds and now sits at around £60 per tonne.
Recycled paper
News & pam gained £5 this week as Chinese demand helped to push it up further. Interest in this grade is also coming from UK and European newsprint mills of course too.
Mixed was also pushed up by a couple of quid as UK and European mills continue to want to snap up exceptionally good value material.
OCC remained stable, but keeping the same very wide spread between the top and bottom of the market. Above £160 per tonne for Chinese specification material has been common, but material for India has been closer to £80 and upwards. UK and Europe is somewhere in between depending on quality demands.
There is a lot of fear in the paper market though, with the uncertainty over a potential Chinese ban casting a lot of shadow. The sheer volume of material that China buys could potentially have nowhere to go next year or the year after if China goes through with a complete ban.
Putting in place the infrastructure to cope with this, won’t be ready in this timescale with at least five years looking more realistic.
The paper PRN price continues to rise, and this is at least providing some support. With the price around £15 per tonne, it seems £5 is being used to support the price for the seller with £10 going into the bank accounts of the buyer. With so much uncertainty, the PRN is being used as rainy day money for the storms that appear on the horizon.
Recycled metal
Scrap steel prices have fallen by £10 per tonne this week, although this fall hasn’t hit can prices as yet.
Aluminium cans also appear to be easing in value with the bottom end of the spread in particular easing down to £900 per tonne. In some circumstances, £1,000 per tonne is still available.
Copper grades however gained an extra £100 per tonne due to expectations of higher demand from China.
Recycling Prices
If you wish to see a longer data set on each table or chart, change the ‘show 10 entries’ drop down to your preferred choice. Both the table and chart (if there is one) will adjust automatically. Our full data set is available here to subscribers.Â
[wpdatatable id=60]
[wpdatachart id=26]
[wpdatatable id=61]
[wpdatatable id=62]
[wpdatachart id=27]
[wpdatatable id=63]
[wpdatatable id=64]
[wpdatachart id=28]
[wpdatatable id=65]
[wpdatatable id=66]
[wpdatatable id=67]
[wpdatachart id=29]
[wpdatatable id=68]
[wpdatachart id=30]
[wpdatatable id=69]
[wpdatatable id=70]
[wpdatachart id=31]
[wpdatatable id=71]
[wpdatatable id=72]
[wpdatachart id=32]
[wpdatatable id=73]
[wpdatatable id=74]
[wpdatatable id=75]
[wpdatatable id=76]
[wpdatatable id=77]
[wpdatatable id=78]
[wpdatatable id=57]
[wpdatachart id=23]
[wpdatatable id=58]
[wpdatachart id=24]
[wpdatatable id=59]
[wpdatachart id=25]
[wpdatatable id=79]
[wpdatatable id=80]
[wpdatatable id=81]
