EA data points to fall in overall PRN demand

And, while the figures showa fall inthe overall obligation compared to 2012,they suggest the marketwill still be tight with regards to glass and plastics.

The obligation figures, published on the National Packaging Waste Datasbase, detail how much packaging waste was placed on the market by packaging producers during 2012. This determines how much packaging recycling evidence – known as PRNs – producers are obligated to buy this year under the packaging regulations.

While these numbers are subject to change, as more producers register or others go out of business, they suggestthat recycling levels for plasticsand glasswill need to increase this year if the obligations are to be met.

This is because the amount of plastic and glass recycling and recovery which will be required to meet the obligation each quarter is higher than that which was achieved during the first quarter of the year (see table below). The quarter one data was published last month (see letsrecycle.com story).

In general, the data shows a fall in obligation across all materials compared to 2012 with the exception of aluminium and plastics, reflecting the impact of the recession and changes in packaging trends.Consequently, thetotal recycling and recovery obligation for the year has fallen from 6.97 million tonnes in 2012 to 6.75 million tonnes for 2013.

‘Encouraging’

James Piper, commercial manager at packaging producer compliance scheme Budget Pack, described the figures as ‘encouraging’. However, he warned that recyclingof glass and plastics would still need to increase during the course of the year.

He said: With prices increasing or remaining high throughout Q1 for both glass and plastic; it is encouraging to see a relative decrease in demand when compared with the overall figures for last year, before applying government targets. This drop in tonnage demand is a reflection of last years decrease in PRN availability and alleviates some of the early target increase worries.

“However, these figures are still concerning as more will need to be done throughout the year to ensure the UK meets its challenging compliance targets.”

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Obligation data for 2013 and performance so far

Source:letsrecycle.com analysis of figures on the National Packaging Waste Database

Glass

A particular fallin the 2013 obligation can beenseen in glass, where the obligationhas fallenby over 80,000 tonnes compared to 2012. This is likely to be welcomed by buyers who had been concerned about the glass market following problems experienced last year. However, even when this fall in obligation is taken into account, the amount of glass recycled and recovered in the first quarter of 2013 still falls short of what is required each quarter (see table above). Therefore commentators have been quick to warn against complacency.

Speaking to letsrecycle.com, Ian Andrews, senior market trader at the Environment Exchange, said: “Glass buyers will take comfort in the obligation being down but the fact that we are still almost 60,000 tonnes short in the first quarter shows there is still work to be done.

“We have seen a reaction this morning to the figures and glass remelt is now trading at 61 per tonne, down from 65 per tonne previously”.

Mr Andrews added that the glass remelt market appeared to be faring better than that for aggregates and that aggregates buyers may find themselves forced to buy the more expensive glass remelt PRNs at the end of the year if the situation in aggregates did not improve.

Plastics

Another market which has caused concern over recent weeks is that of plastics, and, while the obligation data is lower than some had feared, it shows a sharpyear-on-yearincreasedue tothe rise in the business targetfor plastics,from 32% in 2012 to 37% in 2013.

This means that in the first quarter of 2013, there was a recycling shortfall of around 17,000 tonnes – something which has been compounded by problems in the export market due to China’s operation Green Fence.

Mr Andrews said: “The plastics market is more protected than glass as we had a carry in of 40,000 tonnes, but there was still a recycling shortfall in the first quarter. The other worrying thing is the impact of operation Green Fence. We don’t expect the full impact of that to show until the second quarter.”

Dueto thedifficult picture,the price of plastics PRNs today held up at around 55 a tonne.

Metals

Other materials which have also seen an increase in theirrecycling targets in 2013 are steel and aluminium,rising by one and three percentage points respectively.

However, adrop in the amount of steel placed on the market in 2012 means that the obligation in tonnnage terms for 2013 has in fact fallen, which today pushed the price of steel PRNs down from 15 to 13 per tonne. Meanwhile, for both steel and aluminium, the amount of material recycled in the first quarter of 2013 exceeded the obligation, putting buyers in a comfortable position.

Paper andwood

In general, the data points to a comfortable year for paper andwood. And, while the general recycling obligation could look a little tight, this is expected to be met by surpluses in these materials.

Obligation data – comparison between 2012 and 2013

Source:letsrecycle.com analysis of figures on the National Packaging Waste Database