Cullet prices stable despite downturn
10 November 2008
Glass reprocessors have reported "little to no change" in the market for cullet despite the severe downturn experienced by other recovered material sectors.
The strong domestic market and the lack of intrinsic links to demand from the Far East has seen many members of the glass recycling community find that prices have remained constant for the past month, whereas prices for paper, metals and plastics have tumbled.
Some reprocessors have also suggested that with the price of oil falling, things could even improve for the sector by reducing the cost of haulage. And, glass export markets have already been strengthened by the falling value of the pound.
The situation has been summed up by government-funded recycling organisation WRAP, which today put out a statement claiming that the overall market for recovered materials prices is not quite as gloomy as it perhaps seems, stating: "Even in the current climate, not all commodities are affected. The price paid for glass, for example, continues to remain stable."
One Midlands-based glass reprocessor told letsrecycle.com: "Prices remain stable, we are still paying the same prices and the cost of making bottles remains the same. And, for us, the export market has got better with the pound falling."
A sales and purchasing manager for another company said: "Cullet prices are virtually unchanged from where they were a month ago and I see very little movement ahead. From a business standpoint, I would like to see them moving but it's not going to happen any time soon."
Despite this situation, one reprocessor warned that operators should not get complacent in the current economic climate and that he was still a little worried.
He said: "We are obviously worried, but we would be silly if we weren't. I have to say that our order books are full at least until the New Year, however, I have had a couple of people try to squeeze a drop in the price but nothing that they could substantiate."
Mick Keogh, managing director at Berryman Glass, said that if glass prices did theoretically drop, it would not necessarily be a completely bad thing, as it might help to readdress the recent decline in glass quality reported by WRAP (see letsrecycle.com story).
He said: "The more inferior quality material that is coming out of MRFs and some not so well regulated commingled collections, is hardly fit for aggregates. That is a quality issue and, if prices drop and there is more material in the market, the better quality material will be snapped up first."
Pubs and clubs
Some in the glass sector claimed that the commercial trade was being influenced by cash-strapped members of the public drinking at home rather than in bars and pubs. The knock-on effect for the glass reprocessing industry means that some reprocessors have reported a slight rise reported in the amount of green glass entering the waste stream.
One Yorkshire-based reprocessor said that this could prove a problem if it continued and could potentially damage tonnages. He said: "This trend to more drinking in the home could reduce volumes from the commercial stream but it is a backwards step because the amount getting recycled would also reduce."
Confirmation of the trend came today from a spokesman for the Wines and Spirits Association who told letsrecycle.com: "People are drinking less in pubs and more at home and whether there is a connection remains to be seen."
Despite agreeing that there had been a slight change, Richard Taylor, director of Kent-based glass collection service GreenSolve, said: "Pubs and clubs have been selling less but no less than this time of year, and we are getting new customers all the time, which is increasing tonnage in our area at least."