The situation in the Red Sea dominated the post-Christmas New Year market this week throwing in a whole dose of uncertainty.
With shipping lines trying to work out whether it is still safe to use the Suez Canal and Red Sea route following attacks on vessels by Yemani Houthi rebels, they faced a choice of the riskier route (despite protections from an international naval force) and increased insurance premiums, or a longer and safer journey via the bottom of Africa. Both of course came with increased costs.
Inevitably these costs were being passed onto customers and surcharges were being placed on both new sailings, and to the anger of many, on vessels that had long left these shores.
Surcharges of anything between $500 to $1,500 were being placed on containers, which of course meant exporting to destinations such as India, Malaysia, Vietnam, Indonesia and others becomes much more expensive.
It is still early days in this situation, and the full implications are still being worked out. What is for sure is that the next few days, weeks, and potentially months are likely to be unsettled until the crisis stabilises.
The pound was trading at $1.26 this week from $1.27 last week, but the euro was unchanged at €1.15.
Recycled plastics
Film grades in particular were hit this week as they are the ones most likely to be sent to deep sea destinations. The Red Sea crisis therefore pushed down the value of these, as well as poor demand from Europe.
This was slightly mitigated by the rise in the value of the PRN/PERN by about £15 per tonne.
Other grades didn’t see a huge amount of trade as those who came into the market wanted to see where things are likely to head, especially if the European market would become more active after being quiet prior to Christmas.
Underlying prices were therefore largely unchanged, with packaging grades topped up by the value of the PRN/PERN.
Recycled paper
It was very difficult to get a sense of where prices were for OCC and mixed this week. Many who had material were happy to take the best price they could to ensure it moved.
Deep sea buyers had tended to do all of their January trade prior to Christmas so were trying to ensure they could work out how to get material on the water and deal with the implications of the surcharges being imposed by the shipping lines. Difficult discussions were being had, particular where surcharges had been placed on containers that had long left UK ports. This was causing a lot of anger.
Some UK and European mills were active, but not all were interested. Many were waiting to assess the situation to see how it will affect markets over the coming weeks.
What is clear is that prices were down from where they were in December. For OCC, trading was happening anywhere between £55 to £85, and for mixed from as low as £20 to £50.
US and Australian sellers though have been seeing price increases as Asian mills seek material from there.
The situation is uncertain and it could be that global market dynamics shift over the coming weeks, with some believing this will inevitably lead to price falls, but others thinking that reduced shipping capacity will lead to Asian mills needing to secure material early at higher prices in order to secure boxes.
For now, it isn’t clear how this will play out.
Recycled metals
Copper grades fell by £75 on values seen before Christmas, but ferrous metals were up by £25 per tonne.
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
