However, most recyclers spoken to by letsrecycle.com, said that WRAP chief executive, Liz Goodwin, because of her senior position, had to be careful not to talk the market down and that material demand remained strong. But, there are expectations of a market correction and a number of recyclers are recording lower arisings of used paper and board and plastics.
Last week, speaking at the RWM exhibition in Birmingham, the Waste & Resources Action Programme chief suggested the market for recyclables could crash because of world economic volatility, adding that WRAP was there to help if this happened (see letsrecycle.com story).
Crash
One plastics recycler said: There are many doom-mongers in all walks of industry and when you hear WRAP predicting a crash, it is a bit like talking about banks going to crash and people then rushing to take their money out and banks closing as a result. “
He added: “The plastics recycling sector in the UK is strong and wants as many bottles as possible and local authorities should not be put off investing in new collections.
However, Dr Goodwin has won some support for her view. Adrian Jackson, president of the Recycling Association said: She is right, it will crash, but we dont know when. It could be years, it could be months, it could be overnight. Mr Jackson added that there was currently a weakening in prices for paper mid grades and best white grades although there was no downturn at present in the brown grades.
Hong Kong
The concerns expressed by Dr Goodwin came last week after news earlier this month of some increased fees for movement of plastics from Hong Kong for recycling in China. This has lead to some exporters finding they have been hit with extra costs which had not been allowed for in the price they had paid out in the UK. Consequently, some material has been put into storage in Hong Kong while exporters work out a satisfactory way forward.
And, the Hong Kong situation has been exasperated by a massive cocaine seizure at a recycling plant in the Chinese province on September 16. Some 50 million worth of the drug was found after a Hong Kong Police Department action at a warehouse in Fuk Hang Tsuen where suspect cocaine was found hidden in crates covered by waste plastic containers such as used to contain oil.
Market correction
Paper recyclers in the UK have said that they will not be surprised if there is some level of market correction this autumn. Some consider that prices have been relatively high for used cardboard at about 120-130 in the domestic market and more on the export side. Predictions are generally for falls of 10 or even more but these have yet to occur although some recyclers had expected this for September.
Demand from China has remained firm and this has been a factor in the cardboard price staying relatively stable. Plus, SAICA is opening its new boardmaking plant near Manchester at the turn of the year and will need a high level of supplies.And, withlow arisings, pressure to reduce prices is being counteracted by some scarcity.
Exports to Chinaare also benefiting from low shipping rates but the big issue for the Chinese mills remains whether they can maintain their linerboard prices this autumn. One exporter remarked: The Chinese mills are extremely nervous about the last quarter after the Christmas demand eases and will be worried about the state of the American economy.
Another industry expert said that some recyclers will be under pressure because of reduced arisings. He said: “there are pressures across the paper industry simply from the fact that collection rates are down and because of this all sorts of businesses have to eat into their cash.
Quality
Quality of material remains a factor in plastic exports. With China becoming stricter on the quality of imported material, UK exporters say that they are adapting to the need to ensure material contains low levels of contaminants and contraries.
One exporter said that more sorting of plastic film, for example, is taking place in the UK with less lower grade being exported. This is affordable because clean higher quality film attracts a good price, he said, and that “demand for good material from China remains strong”. Markets are also being found for incineration of some lower quality film, such as arising from MBT plants.
Similarly, more sorting is taking place at some MRFs and plastics reprocessors to improve the quality of plastic bottles with mixed plastic pots being separately baled for processing in the UK. And, a and b grades are increasingly being used for used plastic bottle contracts.
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