As predicted in our packaging recovery note update last month, many grades are now experiencing rapid price increases.
Wood PRN prices have risen to their highest level in years, with little sign of dropping any time soon. Despite the belief that wood production would ramp up in the summer months, June volumes are only at 75 per cent of the amount produced in May. With some May figures yet to be reported, these numbers will go up from June.
Paper PRN prices are also higher than they have been in years. Production this month has been comparable to last year, which is positive, although this has not yet covered the deficit that has accumulated in previous months. Paper production remains under pressure from the lack of alternative options available to purchase general recycling obligations.
As suggested in May, the lack of available and affordable paper PRNs means buyers are being forced to look at steel to cover the general recycling obligation. This is resulting in price increases that are giving paper and wood a run for their money.
It looks likely that steel and paper PRNs will now jostle back and forth to fulfil the general recycling obligations and we can expect the prices to continue to increase.
Plastic is one of the few grades where production is significantly ahead of its position this time last year. This grade has been under the spotlight for many months, and with the UK plugging some of the gap left by China’s waste restrictions, plastic prices have plateaued for now. The quarterly data released next month will provide a clearer picture of the outlook for plastic.
Glass remelt and aggregate have had a similar interaction to that of paper and steel. The lower production of aggregate has led to an increased amount of remelt being purchased to cover these obligations, and with the additional pressure on remelt, the prices have risen.
Ed Ewence, Clarity Environmental Business Development Executive, said of the latest PRN market situation: “There is no doubt that the PRN market is in a period of volatility, with rising prices across almost all grades and production under pressure. We understand that this can cause uncertainty for packaging producers and we are working hard during these tricky trading conditions to ensure that we continue to provide the best and most cost-effective solution for our packaging compliance scheme members to cover their obligations through the year.”
Clarity has been buying and selling packaging recovery notes (PRNs) since our business started in 2002. We are now one of the largest and most experienced open market traders of PRNs. To talk to our team about buying or selling any grade of packaging recovery note (PRN), contact us on 0845 129 7177.