As we head towards November, there is a little more certainty in the market, even if that isn’t always positive.
For plastics, the latest NPWD quarterly data helped to push some packaging grades up. In paper, OCC was down by there is strong demand still for mixed, multi and SOW. Metals fell back after jumping up last week.
The market generally feels like it knows where it stands for November, and can now get on with trading using this week as a benchmark, and still dealing with the difficult logistical issues of moving material.
In terms of foreign exchange, the pound was trading at $1.37 by the end of the week, unchanged on last week. It also ended the week no different to last week against the euro at €1.18.
All eyes were on the publication of the quarterly data from the NPWD this week to see what impact it would have on the PRN/PERN market.
Plastic now looks to be in balance and it is highly likely compliance will be met especially with the large carry-in of circa 90,000 tonnes that was brought into this compliance year.
However, eyes will now be on the Q4 data and what the carry-over will be for next year.
The impact on PRN/PERN prices was that they jumped up to £45 from £30 last week, but settled back down quickly to £35.
On physical grades, PET bottles increased by this amount, but weaker underlying demand for HDPE bottles saw no change – this was also partly down to seeing where the PRN/PERN price would land.
LDPE grades are seeing really good underlying demand from Europe and much higher prices are being paid, which increased the overall price of the material. However, UK buyers are more reluctant to match these levels and a wide spread of around £30 to £40 per tonne is emerging between the two.
OCC lost £5 per tonne this week, meaning it has come down by around £10 per tonne over October.
Asian mills were not prepared to pay the high prices of recent weeks, and are looking for the market to ease. With electricity shortages in China shutting manufacturing production, and the busy Christmas period out of the way, there isn’t the demand from there for pulp and finished product.
There is still good demand from Europe, but they are also happy to push the price of OCC down as they don’t want to pay any more than the market rate.
Mixed remains in strong demand though, especially from Europe. Board mills are happy to take hard mixed, but with news & pams short, de-inking mills are happy to take soft mixed at these prices.
Multi and SOW are also in very good demand, with supply of it short, with prices rising to close to the £200 level.
While there is little value to be had in the PRN/PERN at the moment (around 50p), the lack of supply could make 2022 compliance interesting, even if 2021 compliance looks almost certain to be achieved. Higher PRN/PERN values could easily be seen for 2022 if this remains the case.
Copper grades dropped by £200 per tonne after jumping by the same amount the week before. Brass didn’t match this though, dropping by £100 per tonne after increasing by £200 last week. All other grades were unchanged.
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