It wasn’t a dynamic market this week, with all of the recent factors combined with half-term making for a quiet recyclate trading environment.
PRN/PERN prices continued to fall due to compliance looking like it is effectively done for this year, while uncertainty continues due to Covid and the economic impact of that. As a result, many in the market were happy to take this week off, and many don’t expect to be busy this side of Christmas.
There is still a bit of interest in the paper market though, and there is a school of thought that the lockdowns announced for France and Germany will lead to more demand from there as happened in the Spring. This view isn’t universally shared.
Plastics were subdued with no price changes for physical material, but the PRN/PERN price is sliding.
In metals, copper and brass grades dropped though.
Against the dollar, the pound was down a touch to $1.29 from $1.30 a week ago, and the last couple of weeks have been volatile against the euro. This week it ended over €1.11 after being at €1.09 a week ago.
As mentioned above, it was a quiet recyclate trading environment for plastics this week and many expect that to last though November – for packaging grades at least.
With the PRN/PERN now trading around £10 per tonne, the financial incentive isn’t there for many. While UK reprocessors are continuing to take in material, the export market is largely inactive as it doesn’t make sense without the subsidy provided by the PERN.
The recent publication of the Q3 data suggested that compliance is pretty much achieved for this year, so there is little hope November will be more active.
Therefore, the focus is now switching to 2021 and the hope that a new compliance year will bring a better market especially as the fraudsters seem to have disappeared for now.
Prices for both OCC and mixed increased a little this week due to a little extra demand from Europe and South East Asia as companies there bought their November orders.
Whether this lasts into the month remains to be seen. Some are hopeful that the lockdowns announced in France and Germany will lead to stronger buying patterns from mills there as happened in the Spring, especially when combined with the traditionally busier period ahead of Christmas.
Others aren’t so sure, especially as there is the potential for US material to head towards other Asian destinations at the expense of the UK now that China has turned off the taps there too.
The coming weeks will show which way the balance goes. For the time being though, the market enjoyed a £1 rise for OCC and a £2 rise for mixed overall this week.
Copper grades dropped by £75 per tonne this week, while brass prices lowered by £50 per tonne, reflecting changes on the LME.
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For PRN/PERN prices, click here