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Global markets and material price updates

27th April 2017

Melanie Harper

Plastic

The recently published interim Q1 Packaging Recycling Data has been corrected by the environment agency, following the discovery of data errors within the report. The original figures released showed a very positive outlook for plastic, with a healthy 32% of the annual target being met without carry in. post correction, the total plastic figure has been reduced by around 70000 Tonnes. Plastic does still appear to be performing reasonably however, with over 25% of the projected annual target met before carry in. This figure is a stark contrast of the current plastic commodity market, with increased shipping prices to the Asian reprocessing markets causing short time uncertainty, and China’s “Operation National Sword” looking to cause long term pricing fluctuation as exporters suffer customs issues.

For those not aware, “Operation National Sword” is a Chinese governmental initiative to monitor and more stringently review Recyclable waste imports. This has caused a knock-on effect on the amount of plastic accepted for import by Chinese re-processors. Although the exact details of the initiative and its impact on the market are not yet completely transparent, comparisons have been drawn to the 2014 “Operation Green fence” which saw the quantity of plastic imported decrease dramatically.

In terms of specific plastic commodities in the UK, HDPE demand has remained strong over recent months, however a tapering of PET demand has been noticed. What with the UK looking towards a more Circular Economy over the next few years, it is important that recycled plastics markets remain stable, as a less linear system relies heavily on waste as a resource.

Ferrous Scrap

So far in 2017, the Ferrous scrap market has seen some varied instability. Following the Yes vote in the recent Turkish Referendum, it is likely that scrap prices will see less volatility, as the country should now see a slight economic boost due to an outlook of perceived stable leadership over the next few years. Any future political reforms in Turkey will be watched carefully by the UK Ferrous Scrap market, as the stability of the Lira appears a reasonable indicator of Ferrous material demand in Turkey.

Paper

Paper has also suffered slightly at the hands of increasing shipping prices. Paper commodity prices have recently declined, with uncertainty as to the exact cause. Some blame is being directed at the rising shipping prices, with UK Re-processors reluctant to indicate quality as an issue. The recent 160 Containers of paper returned to Ireland due to poor quality / contamination in February has been investigated, but currently no single company has been named as responsible.

Wood

Wood appears to be performing quite well at the start of 2017, the recycling level is on track with packaging targets, and PRNs dropped below £2 a tonne in March. Gate fees have also seen a decrease, with Levies as low as £12.50 per tonne in march, showing that plastic was the must surprising figure out of the whole set of materials, was very positive and looked very strong for the quarters which lie ahead.