The sector generally is optimistic that targets will be met with something of a soft-landing in December for all materials. As a consequence, the price of PRNs – packaging waste recvoery notes – may well remain stable. However, if there is any price tightness it could be found in metals.
Steel reprocessing in quarter three was down by 8,000 tonnes on the previous quarter although aluminium seems to be holding its own with an overall increase in tonnages reprocessed.
The data was published by the Department for Environment, Food and Rural Affairs. Defra revealed that three “large” reprocessors failed to submit processing returns for the third quarter of 2005 in time for their figures to be included in the official data. One of the reprocessors operates in the glass sector while the other two are involved in plastics.
Overall, paper and wood are seen as being in excess coupled with a surprisingly buoyant plastics sector. Instead if there is no further price pressure this year, some may come in 2006, especially as higher glass targets will need increases in glass reprocessing. Nevertheless, with the data showing the “surpluses” available this year for paper and other materials such as plastics, next year may not be too stretching.
One variable is the export market which is significant for all materials apart from wood. Any downturn in demand from overseas markets, such as China, could have a dramatic impact on the packaging waste sector and send the price of PRNs – packaging waste recovery notes – soaring.
Paper
Total volumes of paper recycled in the third quarter were up from 675,000 tonnes in quarter two to 681,000. The data shows the continuing inexorable rise in the export market for used cardboard with 306,499 tonnes despatched.
Glass
Glass shows consistent growth rising to 325,622 tonnes compared to the last quarter and when the missing glass reprocessor figure is added in, this will rise further. One analyst commented that the rise is “spectacular” compared to last year and has to be seen as “very encouraging”. However, whether this growth will meet 2006 demand remains uncertain
Plastics
With two plastics reprocessors still to give in their figures, there is a level of surprise in the packaging sector at the growth in home market reprocessing. There have been instances of inappropriate issuing of PRNs in the past and this historic “malpractice” still colours views of the sector. Observers point to the fact that the market has been boosted by higher oil prices and has vulnerability to overseas demand.
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Wood
Wood has seen little growth and while there are sufficient wood PRNs this may provoke some questions about the need to reclaim more.
Metals
Aluminium is expected to meet its targets, although some reprocessors might choose to carry forward some aluminium PRNs into 2006 in the hope of achieving higher prices next year.
Steel is tighter than might have been expected and will be influenced by the ferrous market which is described as “steady and unexciting”. There are some opinions that ferrous reprocessors are happy not to be reprocessing packaging material as it has helped to keep steel PRN prices higher than they might otherwise have been.
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