And, trading platforms scrap-ex and the Environment Exchange (t2e) said the market seemed to have experienced a sudden “short-term shortage” of available evidence.
The firms said this has led to the price being paid rising from £2 per tonne on the spot market in November 2010 to up to £40 per tonne this month.
They attributed the panic to one the UK's largest glass reprocessors – Nationwide – having its accreditation suspended on December 14 (see letsrecycle.com story) and the onset of wintry weather slowing the movement of material.
Incident
Angus Macpherson, managing director of the Environment Exchange (t2e), said: “Nationwide unsettled the market a bit and I think there is a certain element of panic all round, as when people see the price going up everyone comes piling in so it makes the market look more out of kilter than it actually is.
Mr Macpherson added that the weather appeared to have stifled movement of material. He said: “December was also not quite such a good month for reprocessing activity due to the snow and people have seen glass prices drop and so are not as excited to segregate it out.”
Despite the upset, he stressed that he did not think there was any risk that packaging recycling targets for glass for 2010 would be missed, commenting: “To say we will be out of compliance in 2010 is unlikely”.
However, he said that the carry-over into 2011 would probably be lower than expected. Around 63,000 tonnes was carried from 2009 into 2010 and some had been expecting that up to 150,000 tonnes might be carried from 2010 into 2011 – which is now looking less likely.
“Panic”
Elsewhere, Gareth Goodall of trading platform scrap-ex said:”We saw 2010 glass PRNs trade down on scrap-ex to a low of £2 in late November on our spot market, we then traded a large volume at the £5 level and then the price seemed to gap up to £10 but in very thin trade.
“But the price has really spiked since the start of this year the market now for 2010 vintage is around the £40 mark up from £25 but the volumes are relatively small. There certainly appears to be a lack of sellers of the 2010 out there.”
Another producer compliance scheme said the price of glass PRNs had “gone through the roof” on the spot market in response to the sudden shortage.
Nationwide
Phil Conran, of consultancy 360 Environmental, told letsrecycle.com that some companies would have been dependent on Nationwide for their final evidence for the year before having to hurriedly enter the market at the end of December after the company's accreditation was suspended.
He said: “I think what was a very nervous market in terms of price anyway as the Nationwide incident didn't become apparent to the market until three weeks ago, at the end of the year. So people sitting there smugly thinking that their PRNs would be sent from Nationwide would have gone into complete panic.
“I think there was still enough PRNs but I think there was such little awareness and it pushed people into this panic mode.”
“Slack”
Despite the spike in 2010 prices, both t2e and scrap-ex reported that the price being paid for 2011 glass PRNs on the spot market was more measured at around £15 a tonne.
While reasonably high, due to the uncertainty of a new year, this is still lower than the prices being paid at the same time last year which Mr Macpherson said could reflect the fact that glass packaging recycling targets are remaining the same as in 2010.
This opinion was echoed by Rebecca Cocking, of the British Glass Manufacturers Association, who said the prices being paid for 2011 PRNs was largely in line with what had been anticipated.
She, said: “Being where we were at the beginning of last year it was £20 to £25 per tonne and I think the will be around £10 to £15 per tonne because I don't think there is that drive to take the prices any higher. If we meet what we need for 2010 then there won't be any panic buying.”
Resurgence
The resurgence in the price for glass PRNs is expected to have a positive knock-on effect for recovered glass – with the PRN comprising a large proportion of the value of the material. The price for some grades of recovered glass had slipped to zero in the wake of the glass PRN market at the end of 2010 (see letsrecycle.com story).
One reprocessor told letsrecycle.com that there had already been recovery in the glass market. He said: “We have seen a slight movement that the prices [for recovered glass] are firming up and it is linked to the PRNs, oh absolutely. Green and mixed are still pretty loose but flint [clear] is looking up.”
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