Recycled plastic traders are speculating on PRN/PERN prices and helping to push the price of both up.
We understand, some are quoting physical material prices based on a rising PRN/PERN price, often quoting £30 to £40 more than the transacted price in the expectation that PRN/PERN price will rise by that amount.
Sounds like dangerous speculation and they might find they get burned. More on this below.
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Paper markets continue to be a struggle, although prices have risen a touch for OCC and mixed this week, but other grades are either stable or coming down.
Copper and brass saw price falls in the metal markets.
The pound was up a touch to $1.27 from $1.26 last week, but not enough to make much difference if material isn’t travelling to deep sea destinations anyway. Against the euro, it hovered around €1.13 again.
As mentioned above, recycled plastic traders are in some circumstances speculating on a rising PRN/PERN price.
Transactions for PRN/PERNs were typically in a range of £250 to £260 per tonne (£30 to £40 higher than last week approximately), but some were expecting it to rise to £30 to £40 more than this, so were quoting on their speculative price.
Material prices were rising too as a result, with 99/1 and 98/2 film taking on much of the PRN/PERN increase at around £25 per tonne.
There was a little more resistance for bottle grades, and the price didn’t rise quite so much with £15 per tonne added.
Increasingly, there is talk that producers cannot take on board PRN/PERN prices at this level. SME-sized producers are facing a double whammy of a struggling economic environment with vastly increased costs from meeting their obligation. Something has to give, and there are rumours some might walk away from the PRN/PERN system and take their risk in court.
It is also becoming much more difficult to trade material as those who are selling are expecting a higher PRN/PERN price and quoting upwards as mentioned above. There is a view that the market could grind to a halt in coming weeks, because these prices for both the physical material and the obligation certificate are becoming too high.
Getting hold of material is proving tricky. Getting to sell that material when you have it is tricky too.
It seems like the market is frozen at the moment. There isn’t much material around, and there aren’t many markets that want to buy it.
Highest prices were available to South East Asia with up to £62 per tonne being paid for OCC. Some tonnage, but not much, was going to China and this was typically around the £55 per tonne mark – slightly higher than last week.
UK and European mills were turning OCC away, and paying £40 upwards for it if they were prepared to buy.
Mixed saw a little more interest from Europe that pushed it up a touch.
But other grades such as news & pams were down on last week, and some other grades may ease back in coming weeks too, according to the market.
Copper grades fell by £50 per tonne and brass by £100 per tonne, reflecting falls on the LME. Other grades were stable.
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For PRN/PERN prices, click here