Recycling prices and market commentary: 4 October 2019

October 4, 2019

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Recycled paper, plastic and metals prices were typically stable or downward in value this week, with hardly anything seeing a price rise.

Indeed, only industrial aluminium and lead grades saw an increase.

Otherwise, there was a fall for LDPE film, PET bottles and OCC (see more below).

October is traditionally one of the busiest months of the year, but there is a view in some markets that this won’t be the case this year. Although the plastic packaging grade market remains bouyant thanks to the PRN/PERN price.

The pound was a touch stronger against the dollar at $1.23 this week, compared to $1.22 last week, but this wasn’t really enough to make a difference.

But there was no change against the euro at €1.12.

Recycled plastics

Although the PRN/PERN price fell by approximately £40 per tonne at the beginning of the week, it actually remained stable for the rest of the week.

Following on from last week when it didn’t change, there is some hope that the PRN/PERN price might have settled at this newer level. As a minimum it is hoped that some of the extreme recent volatility has gone – even if some volatility remains.

LDPE film lost some value due to the fall in the PRN/PERN price, although demand remained good from Europe. UK purchasers were less enthusiastic, and were able to find sellers prepared to drop their prices by more than the PRN/PERN fall. A lot depended on quality though, and some UK buyers were happy to match, or at least be close to, the price paid by Europeans for the best quality material.

Without extra demand, PET bottles fell by the same rate as the PRN/PERN price as the supply/demand balance seems satisfactory for both sides.

HDPE bottles are seeing really good demand both domestically and into Europe, and retained the same value as last week.

Forecast prices

	1-week	4-week
PET	399-405	404-410
HDPE	704-710	697-703
LDPE	577-583	578-584

Recycled paper

It was a very quiet market this week, and there are signs it might not get any better any time soon.

For OCC, there wasn’t too much activity at all, with some material going to China, some to other parts of Asia such as India, a little into Europe, and a bit into UK mills.

Prices therefore also dropped a touch by a £1 with mid-£40s to around £60 the range.

Exporters to China are expected to pause spot buying over the next week or two (if they haven’t already) on the basis that shipping times means they can still send material under 2019 quota. Beyond the week ending 18 October, there is a risk it would arrive under 2020 quota, which of course hasn’t been released as yet.

Another factor helping to ease the price is the lower PRN/PERN value for paper, now at around £6 per tonne. With paper compliance now expected to be met, and good supply of woods PRNs, both paper and wood are helping to meet general compliance and this is keeping prices suppressed.

Additionally, summer 2018’s high paper PRN prices saw mills, such as those in India, apply to be accredited for PERN’s when they hadn’t been before allowing exporters to claim against those exports. With a number of paper traders also deciding to get accreditation to take advantage of the previously higher PRN/PERN prices when they hadn’t been before, an estimated 20% of material that was un-accredited is now.

All of this has kept the lid on PRN/PERN prices at a time when actual volume of available material seems to be quite low.

Mixed paper prices remained stable this week, with trade happily continuing into Europe and Asian destinations.

However, news & pam saw a fall due to easing demand.

Forecast prices

	1-week	4-week
OCC	53-57	53-57
ONP	67-71	67-71
Mixed	26-30	26-30

Recycled metals

Lead saw a £100 increase this week, while industrial aluminium grades were up by £25 per tonne. Brass fell back by £25. All other grades were unchanged.