The figures for July – September 2014, available on the National Packaging Waste Database, show a surplus in glass remelt, plastics and steel. However, there was a drop in the amount of glass aggregate packaging accepted or exported.
It follows an encouraging second quarter for 2014 which alleviated concerns over a shortfall in steel recycling, while the government’s decision to lower the glass recycling target has helped create a strong market for buyers.
Glass
An estimated 297,415 tonnes of glass remelt was accepted or exported in Q3 – above the 285,746 tonnes recorded for Q2 and clear of the quarterly obligation for 2014, which stands at 250,000 tonnes.
It was also good news for steel this quarter, which recorded a slight drop on Q2 with an estimated 99,034 tonnes accepted or exported but remained above the quarterly obligation figure of 87,500 tonnes.
And, there was a boost in the amount of plastics packaging recycled, with 218,594 tonnes accepted or exported in Q3 – above the quarterly ‘obligation’ of 194,780 tonnes.
However, there was a shortage of glass aggregate with 119,093 tonnes accepted or exported in Q3 against a quarterly ‘obligation’ of around 134,000 tonnes. However, the drop is unlikely to concern the packaging sector, which can use the surplus glass remelt to fulfill the aggregate demand.
Prices
Commenting on the latest set of figures, compliance scheme Ecosurety, formerly Budget Pack, said it expected packaging recovery note (PRN) prices to drop ‘across the board’.
Mark Sayers, compliance manager at Ecosurety, said: “We are pleased that the volatile PRN materials (glass and plastic) have seen an increase in recycling this quarter. This appears to be as a result of increased PRN prices in previous quarters which has led to more of the hard-to-recycle material being reprocessed, demonstrating the PRN system working effectively.
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“On the back of these figures, we expect to see the PRN prices lower across the board as a result, which is great news for producers. This should reassure producers concerned about target increases for next year. It should also ensure the start of 2015 starts at a lower cost than the start of this year.”
But, Mr Sayers went on to warn that reprocessors may press for higher prices to readdress the balance in 2015.
‘Tipping point’
Meanwhile, Ian Andrews at the Environment Exchange also urged buyers to look to the first quarter of 2015, and warned that exporters would reach a ‘tipping point’ on the value of PRNs if they continued to fall.
Mr Andrews said: “If the buyers look at these figures and say I am not going to buy what I need for another four weeks, there could be issues towards the back end of the year. There has been a reasonably strong excess in plastic, but an additional demand of 20,000 tonnes per quarter next year means we need that for the first quarter of 2015.”
Mr Andrews also warned that reprocessors could have to factor in changes to the metal protocol next year, which will see them unable to claim old rolled packaging in aluminium. The projected 10,000 tonne shortfall could see prices tighten in the first two quarters of 2015.
Chris Taylor, commercial manager at Clarity Environmental, said: “The positive results reported in Q2 have continued into this quarter, and the data shows that we need to hit lower levels in the final quarter of 2014 than have been achieved in every other quarter of the year.
“The overall outlook is very strong and as a result, buyers are now likely to hold off until prices hit a perceived ebb. We can expect to see a drop in price for every grade from now.
“Whilst things look very comfortable for the market at the moment, buyers may take advantage of the position and low prices by buying tonnage in December for 2015. This could put a spanner in the works as it would result in a two month Q4, and things could then end up a lot tighter than they currently appear.”
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