Compliance schemes have welcomed an overwhelming improvement in the provisional packaging waste recovery statistics released for the second quarter of 2014 today (July 22), but some have urged caution.
The figures for April-June 2014, which were made available on the National Packaging Waste Database this morning, show a surplus in materials across the board including glass, plastics and steel.
Concerns over a shortfall in steel recycling were raised following the release of provisional packaging data in the first quarter of 2014, which showed just 78,861 tonnes of steel waste packaging was accepted or exported (see letsrecycle.com story). This has since been updated to 78,912 tonnes.
However, it appears that the amount of steel packaging recycled in Q2 has risen to 102,903 tonnes well above the quarterly obligation of 87,500 tonnes that reprocessors were required to meet.
According to one PRN trader, the spike is due to a domestic reprocessor not getting accredited until the end of February 2014. This impacted supply for Q1 and saw the PRN value for steel rise to 15-17 per tonne a figure which many buyers now presume will fall.
Glass
There was also good news in the glass PRN market this quarter, where aggregate tonnages were up almost 50% on the 106,289 tonnes recorded for Q1. Again, where glass other fell short of the 134,000 tonne obligation in April, it appears to have overshot this mark with 151,290 tonnes accepted or exported in Q2.
And, glass remelt also continued its strong performance from Q1 with 285,746 tonnes accepted or exported above the 250,000 tonne quarterly obligation. Combined, this quarter glass waste packaging sits at an estimated 437,036 tonnes, surpassing a quarterly obligation of 383,182 tonnes.
Meanwhile, plastics also enjoyed an encouraging second quarter, with 233,505 tonnes accepted and exported compared to a 194,780 tonne quarterly obligation. Unlike 2013, the price of plastics PRNs has been falling steadily from April this year and currently sits at around 32 per tonne, a trend which some expect will continue.
Commenting on the figures today, PRN trade Chris Taylor forecast lower prices across the PRN markets in plastic and steel, and expressed relief that the glass other obligation had been surpassed.
Mr Taylor said: Glass other has pulled its socks up in dramatic fashion and the Q2 numbers are up almost 50% on Q1, allaying the concerns that buyers would have to buy the more expensive remelt PRN in order to fulfil their other obligation. This is now looking like far less of a concern than previously expected.
Prices
Budget Pack compliance team leader Lizzie Russell also welcomed the data, and said the firm expected to see a drop in PRN prices across the board.
She said: We are pleased to see an increase in the figures since last quarter, particularly in materials such as plastic. It appears that the increase in PRN prices that we have seen in previous quarters has led to more of the hard-to-recycle material being reprocessed. We expect to see the PRN prices lower across the board as a result, which is great news for producers.
But Ms Russell also warned that the promising set of figures could have repercussions for producers later in the year – reiterating concerns among PRN traders that the market is often subject to a boom and bust cycle.
She added: There is potential that price decreases this quarter could make it less feasible for lower quality or hard to recycle material being reprocessed, meaning that we could see prices increase again towards the end of the year as a result. Budget Pack are currently looking at contracts for 2015, to ensure supply of PRNs at the best prices for our members moving forwards.
Exports
Other concerns raised included the prospect of a further drop in the value of plastics PRNs, which could see exporters bow out of the market.
Commenting on the sector, Ian Andrews, of The Environment Exchange, said: Sellers may well benefit yet. Plastics is a relatively easy material to move as long as you have the value, and dirty mixed plastics are often exported on the back of a strong PRN price.
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What needs to be asked is will this affect 2014 or 2015? Buyers have the power to make that judgement call. If they continue to feed value into the market then exports will continue. If they go for the jugular and target low values then supply may tighten before the year ends which in turn could lead to problems in 2015 when demand is due to increase again by approximately 90,000 tonnes.
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