Glass concerns linger following Q1 packaging data

Provisional packaging waste recovery data published for the first quarter of 2013 indicates that glass recycling has fallen below the level recorded for the same period in 2012.

The provisional calendar year data, published by the Environment Agency yesterday (April 22), shows the amount of packaging recovered or recycled in January March 2013.

Significantly, the data shows that the amount of glass packaging reprocessed throughout the first three months of the year totalled 326,816 tonnes compared to 362,609 for the previous year.

Obligated businesses under the UK packaging waste system will not learn until next month (May 2013) the actual amount of packaging which they will be obligated for in 2013.

However, already some within the packaging recycling sector have expressed their concerns at the results for the first quarter.

This years data is also different from previous years for glass as 2013 is the first year that glass packaging is subject to a split target based on the recycling process. The government has stipulated that 63% of the total recycling/recovery obligation for glass packaging must be met by sending glass to remelt applications (primarily to make new glass) as opposed to aggregates (for use in concrete).

Figures are available for 2012 to show the volumes that went to remelt or aggregates although there was no actual target figure for remelt last year. But, if the obligation turns out to be similar to 2012, the data appears to show that a remelt rate of 55% was achieved in the first quarter of 2013.

Obligation

And, while the obligation for 2013 is expected to be lower than during 2012, it is not thought it will drop by a significant enough amount to positively change the figure.

During 2012 it had been feared that the UK would fail to meet the target for glass packaging due to a lower than anticipated level of recycling in the first three quarters of the year. However a surge in glass recycling in quarter four meant that all of the UKs registered producers were able to meet their targets.

And, some commentators believe that the significant rise in glass recycling activity done at the tail end of 2012, may have had an affect on the first quarter of 2013.

Ian Andrews, senior market operator at The Environment Exchange, commented that some processors may have forced material through late last year that would have traditionally been kept until the next quarter, in order to ensure that targets were met.

He said: What happened in December last year was that material that would usually be dealt with in January was processed in December. Also processors in the aggregate sector believed that materials would be valued slightly differently and made use of the last joint value.

It is going to be an interesting year ahead. Although the paper and plastic figures both appear to be positive they dont necessarily give us the full picture.

PRN

He added that the sluggish performance foraggregate glass in the quarter one figures had seen the price of PRNs for glass rise from around 42 at the start of trade this morning to around 50 currently.

Meanwhile, there are also concerns over the amount of plastic packaging recycled during the first three months of the year. The material is subject to a 37% recycling target in 2013, a 5% increase from 2012.

In total 150,480 tonnes of plastics were recycled but, if the obligation is at a similar level as in 2012, it is thought that as much as 165,000 tonnes of material per quarter would be needed to meet the target.

In paper, the volume sent for reprocessing or export also appears to be up slightly compared to the first quarter of the previous year, with a total of 806,631 tonnes being recorded compared to 797, 173 tonnes for 2012, while both steel and aluminium appear to have maintained broadly similar levels to the previous year.

This is despite data from some major reprocessors including Smurfit Kappa and ECO Plastics still outstanding, meaning that the figures could change, although it is not known the figures are not likely to be significantly different once the final numbers are received.

However, the data will not fully reflect problems that have been felt in the export market, caused by increased restrictions on material entering ports in China which began during mid-March (see letsrecycle.com story), and are likely to have a bearing on data published for quarter two.

Valpak

Duncan Simpson, director of sales and marketing at Valpak, commented that the figures may improve when the processors who have yet to submit their final tonnages do so.

He said: Bearing this in mind, the numbers are not as good as we would like to have seen, but not a total disappointment on the reprocessing side. This is especially so if other reprocessing tonnages possibly are to be added at a later date.

Recent press articles from Berryman and Recresco investing in new sorting and cleaning equipment for glass is welcomed. This increased capacity will help throughput and meeting the targets in the future, but this capacity will take some time to come online. However increased costs are being incurred in the meantime to ensure the material can be sufficiently processed to meet the higher demands of the remelt market.

Mr Simpson added that the lower than anticipated figures would not have been helped by lingering uncertainty in the market following a sharp rise in PRN prices in the latter part of 2012 (see letsrecycle.com story).

He also commented that import restrictions in China are likely to have an impact on the amount of plastic that is recycled later in the year, adding: We hope that increased buying activity and reprocessing, less speculation and an easing of importing restrictions in China will happen sooner rather than later and prices move accordingly.

James Piper commercial manager at Budget Pack commented that it is difficult to fully understand the figures until the 2013 obligation is published.

He said: Whilst the figures show a decline in tonnage recycled in both glass and plastic, when compared with the 2012 averages, it is important to remember this is just one part of the picture.

Until obligations are released by the Environment Agency in May it is impossible to predict what impact these figures will have on the yearly average prices. With companies paying potentially high prices for their PRNs last year, with certain schemes, data will have been reviewed and verified as much as possible between January and April and this should be reflected in the overall obligation figures.

We pride ourselves on our robust purchasing strategies and are confident in our ability to deliver low cost compliance in an uncertain market.

Chris Taylor, PRN trader for Clarity Environmental, said: “2012 was a volatile year for the PRN industry and so far it looks as though 2013 is picking up where we left off. The talking points, yet again, are glass, plastic and steel.

“UK glass re-melt is reporting its lowest quarterly numbers for three years and the combined glass total is substantially less than this time last year. We expect suppliers to continue to command high prices for their evidence moving forward, and buyers will hope that the national obligation has come down substantially to help ease prices.”