It was a week for waiting to see how the market is going to develop over the coming weeks.
For paper traders, there are some who think the market is going to be strong still, while others are expecting a fall. Therefore, most are waiting to see what will happen before deciding whether to trade early for November.
In plastics, next week’s publication of the latest NPWD data is eagerly awaited to see whether it will make a change to PRN/PERN prices – big swings either way could happen depending on the outcome. However, rising energy prices are also in the back of traders’ minds as they contemplate increases to underlying prices.
The more liquid metals market though saw price falls for copper and brass grades.
In currency markets, the pound increased to $1.36 from $1.35 a week ago, while the pound was up against the euro to €1.17 from €1.16 last week.
Early next week, the latest NPWD data will come out, showing September’s tonnages. After a poor August, there is hope this was a blip caused by holiday season, and that the numbers will show compliance is still on target for the rest of the year.
If the numbers are very positive, then the PRN/PERN price may drop, but if they are still poor, then it could surge higher.
This has held back some trade of packaging grades this week, as people didn’t want to commit especially if the PRN/PERN adds a lot more value in upcoming weeks.
However, the recent jump in oil and gas prices is also pushing up the underlying value of plastics. There is an expectation that virgin polymers will rise, and therefore secondary material will too.
Mills seem to want to push prices down at the moment, but sellers are saying there isn’t much material around and so prices should stay stable at least.
The latter tended to win out this week, with not much change in values.
As we head towards the middle of the month next week, some will be trying to trade early for November and this may give us a better indication of the appetite of mills globally.
Those who are exporting to Europe and Asia are also dealing with ever-rising logistics costs, which are being hidden by the high prices. If prices start to fall, export suddenly becomes more challenging to make the numbers add up.
All in all, it is a market that is taking a lot of thinking at the moment. Possibly these current prices suit everybody to a degree, but if demand falls, then that could create a difficult market.
Copper grades fell by £50 per tonne this week, while brass dropped by £100 per tonne.
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