PRN prices fall while packaging sector begins to talk targets

The latest PRN prices show most materials hovering around the 10 a tonne mark, with slightly higher prices for aluminium, between 12 and 16 a tonne, and some notes going for as low as 8 a tonne a tonne, such as in the wood sector.

The belief is that some PRN issuers – particularly exporters – are keen to get any value they can for their notes as they have attempted to balance their books at the end of the financial year.

Trading is beginning to pick up as compliance schemes finish the registration process for their members for the 2003-04 period. However, with the perceived oversupply in PRNs resulting from DEFRA's decision to refrain from raising the packaging waste recovery targets this year, prices are not expected to rise significantly before 2004.

All eyes in the industry are now on 2004 and beyond. The government's Advisory Committee on Packaging is meeting on Monday before delivering its report to government, which will contain recommendations on future targets. The government will then release a consultation paper on the subject of future targets in May or June 2003.

One idea is that targets in future will be announced in three-yearly periods by the government, in order to improve the certainty for business. Targets are expected to rise dramatically over the next five years to meet the proposed 2008 national targets set by Europe – with some possible exceptions.

A new letsrecycle.com report on possible targets until 2008 show that although the glass and aluminium sectors will have to improve radically, the plastics and paper sectors are already very close to their 2008 targets.

Experts are suggesting that PRN prices in 2004 will mostly surpass the 30 a tonne mark and could rise to as high as 40 a tonne. In plastics and paper, however, unless UK material specific targets are raised above European demands, the rise in PRN prices for these materials might not be as sharp as in, for example, glass.

For detailed information on the possible shape of packaging waste recovery targets until 2008, click here for the letsrecycle.com special report.