The lacklustre market is posing problems for some merchants who are seeing less material flowing through their yards which is consequently putting pressure on margins and cashflow. While market prices are stable at present, there is said to be a glimmer of hope for increases with pressure on some grades, including old KLS (cardboard) on the Continent. And, there is some concern among home mills that they might not have sufficient material this autumn.
Gerry West, vice chairman of the Bureau of International Recycling's recovered paper division, said that in the UK many merchants did have empty yards caused by steady demand from home mills and also good demand from Asia and the Far East. He added: “I think there could be a little concern among home mills that they will not have sufficient material this autumn.”
David Symmers, director of the Independent Waste Paper Processors Association, said that the pressure in the marketplace was being caused by exports and a lack of supply. But, he said that the shortage was for all the wrong reasons in the sense that it was down to “the lack of supply”.
He explained that most merchants would like to see more material going through their yards and put the slowing down in supply as caused by the downturn in economic activity. He added that “lower prices mean that collecting office grades, for example, is relatively more costly and so the grades become less attractive.”
Merchants say that the export market is being helped by competitive container prices with these as low as 20 a tonne. While the price paid by overseas buyers for the material may not be much higher than paid in the UK, exporters are able to obtain export PRNs for their material. With the PRNs having a value in the order of 25 this helps to make exporting more attractive.
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