January 2021 so far has brought rising prices for many grades, albeit within difficult trading conditions.
As has been widely reported, there are delays and bureaucratic issues for exporting into the EU at the moment, despite the deal agreed between the UK and EU at the end of 2021.
Those who export plastics to non-OECD countries are now also faced with the fact it is illegal until the UK agrees export conditions with destination countries.
For plastics grades, January 2021 has brought a new compliance year and this has increased the value of the PRN/PERN that has provided some support (more on this below).
Paper grades have seen an increase for OCC and mixed despite low trading volumes (again more below).
The last time this report was produced on 18 December, the pound was trading against the dollar at $1.35 and is at the same value this week. Against the euro it was trading at €1.11 on 18 December and it was also at the same value at the time of writing.
Demand for recycled plastic has been hit by a combination of factors at the start of January 2021.
Exporters were all prepared for the new Basel rules coming in at the start of the year, but what they were not ready for was the mess that meant they are unable to trade with non-OECD countries such as Malaysia until the British Government has agreements in place.
Many had containers ready to go that had to be cancelled and are now having to find new markets for this material.
With Turkey also banning mixed plastics from the start of the year, this is also a harder market to access, especially as it is an OECD member.
Those sending material into the EU are also finding it more challenging due to port delays, lack of haulage availability and increasing paperwork. Indeed, EU buyers are currently less interested in UK material although some demand is still there due to lockdowns being imposed in their own countries.
Despite this, prices have risen and this is because the PRN/PERN price has risen to just below £85 per tonne for this month, from just £15 in December for 2020 compliance.
Material prices haven’t risen quite as much though, which is a reflection of the underlying weaker demand.
January 2021 has brought rising prices compared to the end of 2020. OCC has increased by £10 per tonne over the Christmas period up to today, while mixed paper has increased by £3 per tonne.
Demand from mills remains good from Indonesia in particular, but there is also enough interest from EU mills if you can get past the port delays. Other South-East Asian destinations such as Malaysia and Vietnam have also been in the market.
Despite that, the market has generally been considered quiet. With the UK in lockdown and shops and hospitality not seeing the usual Christmas volumes, material has been in short supply.
While MRFs are said to be dealing with much more household material than usual this year, it appears this is taking time to filter out and quality is always a challenge at this time of year due to metallic wrapping paper and cards entering the fibre stream.
There is still a great deal of uncertainty in the paper market, and nobody really knows which way the market is headed. But the general feeling appears to be that there is a lack of supply and growing demand that could help push prices higher for a few weeks yet.
However, it is always worth remembering that the market is always predicted to go up until the moment it starts to go down.
Not too many metal grades have increased between now and the last report on 18 December 2020. Copper was up £25 and ferrous grades (including cans) by a further £5 per tonne.
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