There remains demand for most materials, but supply seems to be the problem at the moment.
In the general economy, it appears that January was a quiet month after many people made an effort for Christmas.
This means there is less packaging available in the domestic, retail and manufacturing streams.
But strong demand continues to come for most materials, especially from Europe and some parts of Asia. However, with it being Chinese New Year this week, demand from some parts of Asia was cooler.
The question for many though is whether this demand is temporary. Worldwide people are facing higher energy and fuel bills, and inflation is a global problem. As things get more expensive, are economies likely to suffer? If so, the impact on the recycling sector will be based on how the supply/demand balance is affected.
Following the Bank of England’s decision to increase interest rates from 0.25% to 0.5%, the exchange rate against the dollar rose to $1.35 from $1.33 last week. Against the euro though, it dropped from €1.20 last week to €1.18 this week.
Plastic prices continue to go from strength-to-strength. Low supply has been reported, especially from Europe, and this is driving demand at present.
With gas and oil prices also high, this is helping to push up the value of high-quality polymer grades.
Bottle grades saw prices rises of £30 for PET and £15 for HDPE this week. Underlying demand for film helped increase the price by £10 per tonne.
The value of the PRN/PERN was up by just £1 this week as participants try to get a feel for 2022 compliance.
It was generally a quiet week with many Asian buyers operating at reduced capacity or out of the market with it being Chinese New Year.
With most also having bought for the month last week or prior to that, it was about logistics and finding vehicles and containers to move the material.
However, those that were in the market were seeing prices rise. India continued to be active and was pushing OCC prices higher as it tried to get material, while European demand for mixed continues to be strong.
It has also been rumoured that some UK mills are suffering from low stocks and are actively seeking fibre, but are struggling to get it with arisings from domestic and commercial sources all low.
There could be a few interesting weeks ahead. But there is also a strong view that these current prices might be the limit mills are prepared to pay, and that prices could flatten for now. We’ll have to wait and see.
Only aluminium grades changes this week. Industrial metals were down by £50 per tonne, but cans have increased following monthly reviews that took into account recent LME values.