Fears of PRN oversupply nudge wood and plastic prices down

Many figures in the industry are reporting that PRN prices are still very stable, and that an “impasse” has developed during the year around a “psychological threshold” at 30 per tonne. Buyers have been keeping to their side of the 30 mark, refusing to pay more than that figure, and sellers sticking to their side and refusing to sell at a lower price – with the exception of aluminium.

However, some sources are now saying that as a result of the figures released last month by the Environment Agency (see letsrecycle.com story), which revealed the amount of recycling that was carried out in the first two quarters of 2002, some reprocessors are starting to accept a lower price for their PRNs fearing an oversupply.

Although not seen in aluminium, which is maintaining a strong value for its PRNs, some of the other materials, particularly plastics and wood, may be beginning to falter in price.

Ripples
One recovery note buyer told letsrecycle.com: “Some plastic firms that were asking for 40 per tonne before the Agency figures came out began accepting as little as 32 after the figures were released, so there have definitely been some ripples from that.”

The reaction of those on both sides of the industry has been some degree of surprise at how much wood and plastic recycling had been reported in the Agency packaging figures. Plastics experts have said that with the run-up to Christmas increasing the flow of plastic packaging in the third and fourth quarters of 2002, the oversupply of PRNs is a real possibility.

One plastic company chief executive said: “The final quarter of this year may see an increased availability of PRNs in the marketplace and these will have an impact on prices. On the basis of Environment Agency figures – which suggest there to be a high supply of PRNs in the first half of this year, we can assume around at least 180,000 PRN material has been recycled. The trend for oversupply of PRNs may have an impact on prices more towards the back end of this year, seeing prices possibly erode.”

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