The packaging recovery note (PRN) market continues to experience a period of volatility, with huge swings in price for many grades this month.
The eagerly awaited, updated and verified, Q1 2019 packaging recycling data was released on 15 May, providing insight into how much packaging waste has been recycled or exported during the first three months of the year, and enabling a comparison against the UKs overall obligation.
The data revealed that glass, wood, paper and steel all performed well, showing an increase compared to the same period in 2018.
The performance of plastic continues to be a cause for concern. Whilst there was an expectation that we would see larger volumes reported this month, boosting overall production, the latest monthly data shows that the UK currently remains approximately 15,000 tonnes behind the same period last year. This is further compounded by significantly reduced carry-over from 2018. The Q1 figures were more positive than initially expected in the face of export difficulties, but a significant increase in production is needed for the remainder of the year and the price of plastic PRNs remain high.
Ed Ewence, Business Development Executive in our PRN trading team, said: “There has been a significant change in the PRN market this month, with multiple grades experiencing huge swings in price. Plastic remains heavily in the spotlight, once again shaping up to be the most talked-about grade this year. And despite the price of PRNs already reaching an all-time high, we could see prices continuing to increase through the month in response to the latest data.”
The cost of paper has softened a little in response to some strong monthly data, showing production is now at 160,000 tonnes ahead of where it was this time last year, which is around an 18 per cent increase. And although wood was the problem grade for most of last year, following another bumper production month, which outpaced any month in 2018, we have seen the cost of wood PRNs come down to similar levels to that of paper. This, once again, puts wood in contention to be used for the General Recycling obligation.
The Q1 data provided positive news on steel. However, production is still lagging behind last year’s figures, despite making some work to close the gap through May. The much-publicised collapse of British Steel earlier this month brings this grade into question and we will closely watch the impact on the price of PRNs as the situation progresses.
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.