May has so far brought about price rises for certain plastics and paper grades, but are there warning signs on the horizon?
For plastics, underlying values pushed up the price of some key packaging grades, despite the PRN/PERN price being static.
In paper, there was good demand for OCC and news and pams.
However, some metal grades dropped, and none increased in value.
The market was helped by it being early in the month, and mills and recycling plants are looking to build stocks.
But many are questioning the economic situation, and whether rising interest rates, higher fuel and food costs, and increased taxes will soften demand. On the other hand, the demand for recycled content continues to be driven by corporate desire to be doing the right thing, as well as plastics packaging taxes.
If global economies head into recession though, which some are predicting, then that will inevitably put some downward pressure on recyclate prices.
In foreign exchange, exporters benefited from the pound falling further against the dollar to $1.23 from $1.25 a week ago. With the pound at $1.31 at the beginning of April, this fall has been sharp and made UK material much cheaper.
While the drop against the euro has not been as pronounced as against the dollar, it still eased to €1.17 from €1.18 last week.
Strong underlying demand, especially from Europe, helped to drive key packaging grade prices higher this week.
PET in particular gained strongly with warmer weather helping to stimulate demand, on top of the effects of a month of the Plastics Packaging Tax.
LDPE grades were also up thanks to very good ongoing European demand for film.
With plastic demand strong and prices higher, there is more incentive to sort, so lower value grades such as pots, tubs and trays are starting to see positive values.
The PRN/PERN price seemed settled this week with buyers and sellers happy with current levels.
The falling pound against the dollar made UK OCC cheap for deep sea buyers, so South East Asia in particular was happy to snap up any material it could. With the added benefit of an £11 PRN/PERN, there was an incentive to pay good prices for material.
For inspection destinations, anything from £165 to £175 was achieved, but the spread was wide to other destinations that had less interest. UK domestic and India was more around the £150 level.
Looking at mixed, European interest was still there, but this market was largely static this week.
However, with DS Smith’s Kemsley mill set for a 10 day shutdown at the end of the month, this may hit domestic demand for these grades.
News & pams has gained more interest in recent weeks, especially from UK and European buyers and gained another £10.
Brass was down by £50 per tonne, and ferrous grades by £20 per tonne this week. The start of the month also brought lower steel and aluminium can prices following recent falls on the LME.
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