The coronavirus outbreak in China had a major impact on non-ferrous and ferrous metal prices this week, forcing them downwards.
Copper was particularly hit, but most metal grades suffered too.
In other materials, plastic packaging grades were up a bit responding to the increase in the PRN/PERN price despite underlying demand being a touch lower.
For paper, OCC was up a little bit more as demand increased a little.
FX market conditions were largely stable with the pound a touch stronger against the dollar at $1.31 from $1.30 a week ago, but it was unchanged against the euro at €1.18.
Packaging grades were boosted by a £20 rise in the price of the PRN/PERN this week.
However, underlying conditions are a touch weaker, so the physical price didn’t rise by the same amount.
Buyers of bottle grades are well stocked, so these grades only saw a £10 per tonne increase on last week.
With film grades, there remains good demand from Europe, but UK and Asian buyers are less eager to buy. As a result, the material price only increased by £15 per tonne following the PRN/PERN price rise.
This is partly aided by nervousness in the export market of sending containers abroad. Instead, those trading into Europe are tending to be cautious and are mainly loading curtain-sided lorries with good quality material. This is because there is more risk of longer inspections with containers both at UK ports and European and Asian ones.
There is talk in the market that the UK environment agencies are cracking down on exports to Hong Kong too, and these appear to have ground to a halt. This is because they believe they are not being recycled there, but are only transition tonnages to elsewhere in Europe.
OCC prices continue to creep up as Indonesia continues to lead the way in paying higher prices for the material.
Overall, the price increased by a couple of quid reflecting this increased interest. Indeed, prices of up to £50 per tonne are now being talked about for the best quality material going to Indonesia, although low- to mid-£40s is matching this.
China specification material is also around the low-£40s mark, while elsewhere tends to be in the £30s at the moment.
There is a general feeling that these price rises aren’t sustainable, but this general feeling has lasted a few weeks now. Could the OCC market keep surprising by increasing further? Who knows, but it still seems unlikely it will get back to historic averages (£91 per tonne over the last eight years) in the short-term at least.
News & pam demand is also easing with this grade losing £2 per tonne. Mixed paper was unchanged.
Multi and SOW have also seen a softening in demand and prices have fallen to reflect that.
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Prices for metals have tumbled on the LME due to fears over the coronavirus in China.
With China the main buyer of global industrial metals, shutdowns of cities and transportation due to coronavirus has also hit demand for these metals for construction.
Copper in particular fell in value, losing around £300 per tonne for scrap. Ferrous grades, including cans, also dropped for the same reason.
While it fell a little, aluminium wasn’t hit as much, as China is the world’s primary producer of the virgin material.
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