June was one of the most volatile months we’ve experienced for plastic packaging recovery notes (PRNs), reaching the highest price of the year in the middle of the month.
Stronger plastic production figures were published in the last release of monthly data, with over 89,000 tonnes declared. Whilst this is 16,000 tonnes more than the figure reported in May 2018, there does remain a great deal of uncertainty about whether plastic will hit its recycling target for the year due to the low carry over tonnage.
A statement released by the Advisory Committee on Packaging (ACP) this week has restored some confidence. Released following an emergency meeting to discuss the rapid escalation in PRN prices, the ACP, a committee set up to advise the government on packaging policy, stated that the ‘unprecedented’ surge in PRN prices ‘does not properly reflect the current recycling situation’.
The ACP went on to say that market reports for April to June indicated strong levels of packaging recycling for the second quarter of 2019 and “greater scrutiny by businesses on waste packaging reprocessing opportunities”. It therefore expects this recycling performance to lead to a market correction and more stable prices.
Paper PRNs have steadily increased in price through the month. The monthly data showed some healthy paper production for May, with circa 315,000 tonnes reported on the NPWD, which is 87,500 tonnes more than the figure for May 2018. It is thought, however, that the impending export restrictions, which are widely expected later in the year, are keeping the paper prices high.
Aluminium trading prices have also remained high throughout June, and with the ACP acknowledging this week that there remains a problem in the sector, there are questions over whether the price will ease in the coming months. Reported aluminium production in June tells us that around 8,000 tonnes more PRNs have been produced so far this year than at the same stage last year.
The steel market reacted to the news of British Steels’ liquidation with a price rise at the end of May, but steel prices in June have been fairly steady, remaining at the higher levels but with no further upsurge.
PRN production for both wood and glass have so far been positive in 2019, with both grades showing higher levels than at this stage in 2018. We’ve seen the price of wood softening from the high point at the end of last year, and prices steadied in June, providing welcome relief for producers.
Packaging Compliance Scheme Manager, Martin Trigg-Knight, said: “It is a difficult time for producers and reprocessors, with volatile PRN prices, export difficulties, higher recycling targets and increased inspections by authorities. We are working hard to support our packaging compliance members and suppliers during these challenging times, whilst also trying to prepare them for the likely changes to extended producer responsibility (EPR) that lie ahead. We will continue to keep the cost of compliance as reasonable as we can for our members, and limit the impact of the impending changes by helping them to future-proof their packaging.”
Clarity has been buying and selling packaging recovery notes (PRNs) since our business started in 2002 and we are now one of the largest and most experienced open market traders of PRNs. To talk to our team contact us on 0845 129 7177.