Recycling prices and market commentary: 30 November 2018

0
134
aluminium can recycling

This week in the UK recycling market appeared to be about positioning for 2019 on the whole.

In the view of most, the entire market is uncertain about where things are headed. This is a result of escalating PRN prices and whether this will continue in 2019, uncertainty over purchasing patterns and new legislation from international markets (particularly Asia) and how Brexit might affect the market.

Advertisement

This means that in some cases, particularly for OCC, some are trying to anticipate the market for greater rewards down the line – if those rewards come. See more below on this.

The PRN market continues to go crazy for some materials with aluminium now in the range around £140 per tonne. With the plastic PRN now above £90, £20 above where it was a month ago, this is starting to push up the physical price too. Will we shortly see the first ever £100 plastic PRN like we have with aluminium, and will 2019 push the value even higher?

Glass remelt and aggregate has also increased to a midpoint of £41 per tonne.

In other market conditions, shipping looks to have increased in the range of $100 to $200 for December depending on volume and relationships. At present, this isn’t affecting the market too much as the PRN value for paper and plastics in particular is making UK material very attractive.

Although the pound fell a touch against the dollar to $1.27 this week compared to $1.28 last week, the pound has largely traded in a range of $1.27 to $1.31 since the beginning of July. This continues to give an advantage to exporters within this range.

Against the euro, the pound was unchanged at €1.12 this week.

Recycled plastics

The PRN has started to benefit higher quality film grades and helped to get it moving, albeit not in a flood.

LDPE 98/2 and 99/1 has seen some improving demand with the PRN rising by £20 in the last month and this has helped to add £10 in price to the physical material. UK material on the international market, if you can find a buyer, looks cheap as a result even with the recent price rise.

When aided by relatively cheap shipping and a supportive exchange rate, demand for film has improved a touch.

Bottle grades remained stable this week, as did industrial plastics.

Forecast prices

1 week           4 week

PET       300-306         298-304
HDPE    530-536         529-535
LDPE     230-236         233-236

Recycled paper

There was a bit of a stand off between buyers and sellers this week for OCC and to a lesser extend mixed.

The reason was that sellers expect that prices have hit the bottom of the current cycle and will rise shortly – across the market and not just for Chinese specification material.

Unsurprisingly, buyers think differently. This meant that there was little spot tonnage trade this week.

For those who were trading, Chinese specification material was largely where it was last week, although there were some small trades at £120 per tonne.

Overall though, the market was pretty much unchanged because so little material was being traded.

With this effectively the first week of the month as far as December buying is concerned, this could well be the trend for the rest of the year. However, there is a possibility Chinese buyers may have some indication of initial 2019 tariff levels mid-month. If that happens, it could kick-start the market.

The problem though is that there is so much uncertainty at the moment, that it is a risky strategy to hold onto material in the hope the market will rise. There isn’t strong appetite for material from other destinations, leaving those who are holding onto material, dependent on the whims of Chinese politicians and officials.

In other market factors, the PRN for paper has eased off a little, which might take some pricing advantage away too, particularly if it were to fall back more over the remainder of the obligation year.

Forecast prices

1 week        4 week

OCC      93-97           93-97
N&P      113-117       113-117
Mixed    43-47          43-47

Recycled metals

Both copper and brass saw £100 per tonne increases this week following advancing prices on the LME.

Can prices remain stable, but it wouldn’t be a surprise if the current £140 aluminium PRN helps push up aluminium can prices for December.

Recycled 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

 

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.