The final 2015 Q4 packaging recycling data has been released by the EA with encouraging results.
The current end of 2015 situation is as follows:
- All materials except for Glass other and EfW (Recovery) met their targets. However Glass re-melt can be used in place of Glass Other and any recycling PRN can be used in place of EfW.
- Paper – Strong Q4, which was probably helped by the price increases in the final few months of the year. Paper met its target easily and was always expected to, however the uncertainty around EfW earlier in the year was responsible for the prices.
- Glass other – Relatively low Q4, however there was little pressure on the market due to the consistently positive glass re-melt recycling rates. Prices remained low throughout 2015.
- Glass re-melt – Still a strong performance in Q4, despite prices decreasing towards the end of the year. Ensured that the overall glass target was met, regardless of the lower Glass other recycling rates.
- Aluminium – Strong performance in both Q3 and Q4 have ensured that Aluminium met its target. Very positive performance considering the several changes in regulation that Aluminium has seen this year. This should hopefully stabilise some of the price volatility seen during 2015.
- Steel – Q4 has seen a stronger performance than Q3, but the first two quarters were largely responsible for the end of year position. Prices were increasing in the final quarter for Steel which reflects the uncertainty this market is currently facing. 2016 could be a difficult year for steel PRNs and the Q1 performance will play a big part in the 2016 prices.
- Plastic – A big increase in performance compared to the 3 previous quarters. Prices continued to fluctuate up to the end of the year, but the Q4 performance ensured that the end of year situation was much stronger than was perhaps expected earlier in the year. The results of the plastic consultation and resulting potential recycling target change will play a big part in pricing for 2016, although this performance should help to reduce some of the volatility. However, as with the glass consultation, we may see a delay in recycling rates as both re-processors, exporters and producers wait to see the outcome of the consultation, potentially resulting in a slower Q1 2016 performance.
- Wood – Continued good performance throughout the year. There were some large PRN price increases at the end of the year, due to the expected shortfall of EfW, although it doesn’t appear as this improved the recycling rate. The full end of year situation asks more questions as to why this material experienced such dramatic price changes, as it normally one of the most stable materials.
- EfW – This was the cause of the majority of paper and wood PRN prices increases throughout 2015 as it was expected that EfW would end the year well below the target. However as more sites became R1 accredited and therefore able to release PRNs throughout the year (whilst also being able to release PRNs for previous quarters), the data rapidly improved throughout the year. Although the target was missed for 2015, it is most likely well above what most people were expecting the end of year situation to look like. This should hopefully improve the stability of the market across several materials for 2016 and it one of the most positive results of 2015, when compared to the outlook at the beginning of the year.
We also have some initial information on the carry in as well:
- As was largely expected, carry in is down in all almost all materials compared to 2015, except for Glass other which has strangely increased by nearly 350% compared to 2015, despite the end of year target not being met.
- Paper has experienced the largest decrease in carry in, however paper usually easily exceeds in recycling target for each year, so this should hopefully not affect prices by a large amount.
- Glass re-melt has had a relatively large decrease and although some of this is slightly offset by the Glass other carry in, the continued increase of both the Glass recycling target, and also the greater reliance of Glass remelt as part of the overall target could cause some slight uncertainty around pricing. However, a strong Q1 performance would assure people that 2016 should see another strong performance for Glass.
- Aluminium has seen a large relative decrease in carry in for 2016, however the strong Q3 and Q4 performances should reassure people that the overall position for Aluminium in 2016 will be stronger than 2015.
- Steel has seen a relatively small decrease, which should not affect early 2016 prices by too much. This should be seen as a positive, considering that the Steel market could have a more difficult than in 2015.
- Plastic has seen a large decrease, which although it will not improve the early 2016 prices, it will be difficult to anticipate the 2016 market until the consultation results are announced.
- Wood has seen a decrease, however it is usually a material which easily exceeds its target each year and this should not affect prices for 2016.
- EfW has also seen a decrease, although given the initial worries in 2015 regarding EfW, it is perhaps a stronger carry in than expected. Given the continually increasing performance throughout 2015, this news should not be seen as a warning sign for 2016.
If you have any questions about the Q4 packaging data, please do not hesitate to get in touch with a member of the packaging team.