Recycling prices and market commentary: 4 January 2019

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ND Paper
A Chinese paper mill owned by Nine Dragons

Recycled plastic and paper prices remained relatively stable over the Christmas period, but changes appear to be on the way.

However, the metal market fell considerably, while volatility began on the first day of PRN/PERN trading and looks set to be with us all year.

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Overall, the end of December 2018 and into January 2019 saw little trading in the recycled plastic and paper markets due to export markets effectively being closed or buying only small amounts. With UK and European outlets also slower due to the Christmas holidays, it was generally a quiet time.

For the metal markets, bad economic data saw big drops on the LME, that were reflected in the scrap market.

In the PRN/PERN market, it was plastic that again dominated, breaking the £100 barrier with ease, to reach £130 per tonne this week. Where will it go? Nobody is quite sure.

Shipping for the export market remains hard to get hold of with the Chinese New Year and Spring Festival around 5 February already starting to have an influence. Haulage within the UK and Europe is also still recovering following the Christmas break.

The pound has strengthened a touch against both the dollar and euro since before Christmas, but not by enough to make much of a difference.

Recycled plastics

In terms of the physical market, there was no real change over Christmas with markets very quiet.

There is talk that the Environment Agency won’t approve exports of plastics to Malaysia at present, but this hasn’t been officially confirmed. This is in response to Malaysia getting tougher on plastic imports, but the country hasn’t fully closed to exports either.

With China now closed for over a year, and Vietnam, Malaysia and Thailand all either closed or tougher to export to, 2019 is looking like a very tough year for the export market.

An added complication is that up to half of all accredited plastic exporters are still awaiting authorisation for 2019 exports from the Environment Agency. This is means not everybody is able to export yet, slowing the market down further.

With all this in mind, and fears about 2019 generally, the plastic PRN/PERN price has show up to around £130 per tonne. It has yet to affect the physical price, but a £40 increase on the price from December is likely to push up material prices in the coming weeks. However, a lot will depend on demand, which currently looks weak, especially as Asia manufacturing and the world economy in general doesn’t look too healthy at present.

Indeed, our forecast price below has suggested other factors will drag the price down, rather than the PRN/PERN price increasing it. It remains to be seen whether the price is pulled down by these or pushed higher by the PRN/PERN influence.

Forecast prices

1 week           4 week

PET      295-301         296-301
HDPE    569-575         571-577
LDPE     245-251         246-252

Recycled paper

The market remains quiet after Christmas with demand weak across all destinations whether domestic or export.

There is a lot of apprehension in the market as it becomes clear how much Chinese quotas will be reduced this year. With Chinese mills reportedly full and unlikely to buy much before the Spring Festival at the beginning of February, the month ahead is expected to be quiet.

Recent weak manufacturing data from China will also be a concern as it could lead to less purchasing of finished product from paper mills, and therefore less demand for recovered fibre.

However, OCC prices have risen a touch since before Christmas due to a bit of extra demand that came this week and over Christmas for January tonnage for China and elsewhere. However, with much of that satisfied, the market has eased off again in terms of demand, but those prices have stuck.

Mixed has eased by just a pound this week, due to falling demand from Europe that gorged on cheap mixed at the end of last year. Christmas cut this demand, but it might rise again in the coming weeks.

Haulage and shipping is a challenge for the market at the moment, as mentioned above, with hauliers still returning from Christmas breaks, and shipping lines adjusting sailings ahead of the Chinese New Year Spring Festival.

Forecast prices

1 week        4 week

OCC      76-80           78-82
N&P      98-102        103-107
Mixed    38-42          40-44

Recycled metals

Copper prices have dropped by £300 per tonne over the Christmas with weak economic data pushing prices lower on the LME. In particular, poor Chinese manufacturing data suggested a slowdown in its economy. All of this had an impact on copper prices.

Brass has also suffered for the same reason, with the scrap price falling by £150 per tonne.

Fears of the world economy, and a potential construction slowdown, have hit the price of steel. All scrap grades, including cans, have fallen by £10 per tonne this week.

Recycling 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

 

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