In a turbulent week for the wider UK economy, it was difficult for the recycling sector to understand how it would affect the material market.
For many, it was a case of waiting to see how and if things would settle as the pound was all over the place, especially against the dollar.
Last week, the pound was trading at $1.11 and was actually a touch higher at the time of writing at $1.12. But of course, early in the week it had fallen as low as $1.03. It wasn’t quite as dramatic against the euro, but it still swung from €1.14 last week down to €1.11 before coming back up to €1.13 at the time of writing.
Those exporters who were able to lock in these lower exchange rates suddenly found their material was cheaper for buyers in deep sea destinations in particular, although there was also some benefit to sending to Europe.
UK recyclers couldn’t typically respond at these levels for it to make economic sense, and so tended to be reluctant to buy.
However, none of this lasted long, and the market as a whole stepped back as the week went on waiting to see how things would develop.
There was some interest from Turkey and Asia for film this week, helped by the falling pound against the dollar. But they were not prepared to pay for this advantage and wanted material at competitive values.
European buyers were a bit more reluctant. Even though there was a bit more advantage from the pound/euro exchange rate, nervousness about the market outlook meant many did not want to buy. Those that did come in tended to want lower prices. Overall, it was this that brought prices down.
Bottle grades were largely stable reflecting the unchanged PRN/PERN value.
One trader said that “pricing is all over the place” and that definitely seemed to be the case this week.
Some deep sea traders were able to take advantage of the low pound against the dollar and were getting orders from mills. But this didn’t last long.
European mills and those in the UK didn’t have the same advantage (although there was a little for the former), but it wasn’t enough to make them eager to buy.
OCC in particular was able to keep moving, but it is taking lower prices to make that happen, especially as the PRN/PERN has come off over the last couple of weeks.
Good quality mixed is still able to attract prices anywhere from £40 to £50 into Europe, although orders are a bit lower. In order to ensure they sell material, others are happy to accept orders anywhere from £10 upwards especially to UK mills.
There were no changes for non-ferrous metals this week, but ferrous grades benefited from the lower exchange rate and increased by £15 per tonne.
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For PRN/PERN prices, click here